New data shows that crypto investors and traders are withdrawing their BTC from cryptocurrency exchanges in record numbers, following the historic Black Thursday collapse in mid-March.
While this may initially sound like a bad thing for the market, it has incredibly bullish implications that provide a highly optimistic outlook on Bitcoin’s future.
Data Shows Crypto Investors Are Storing Less BTC on Exchanges
Fears over the unpredictable impact of the coronavirus outbreak on the economy, investors prepared for the worst by fleeing to cash.
This caused Bitcoin price to collapse to under $4,000 per BTC. During the chaos, a number of cryptocurrency exchanges suffered outages, while others struggled with their liquidations engines, causing a cascading effect that drove prices lower.
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Other assets like Chainlink flash crashed in the carnage, dropping to as low as $0.01 per LINK token on some platforms.
Many of the biggest whales were completely wiped out, and liquidations hit astronomical figures.
Ever since that devastating day, the crypto market hasn’t been the same. Fewer and fewer crypto investors are now holding their BTC on exchanges. Glassnode data shows a drop by over 300,000 BTC and climbing – even as Bitcoin price goes up.
Less trust in cryptocurrency exchanges is not the greatest situation for the cryptocurrency market, which is already known as a wild west type environment. However, this could have incredibly bullish implications for the scarce asset.
Are They Holding For the Post-Halving Bull Run, Or Something Else?
Less BTC on crypto exchanges means less chance for panic selling. It also could indicate that crypto investors are becoming increasingly confident that the bottom is in after Bitcoin failed to set a lower low, even in such chaos.
With how limited the Bitcoin supply is – only 21 BTC to ever exist and even less currently in circulation – the more of the asset that is held in storage means less is being sold into the market, keeping selling pressure at bay and allowing prices to increase.
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And with Bitcoin‘s BTC block reward halving just days away, this scarce supply is about to get even tighter.
The halving also could be behind why more crypto investors are once again holding their BTC in cold storage and off exchanges. They’re expecting the prices to mark up considerably over the next year or two, then will move their BTC back to exchanges in an attempt to sell the top of the next rally – a rally that could finally be here.
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