Everyday Is “Proof of Keys” Celebration For Bitcoin HODLers!!

“There’s no reason to sell now,” Mike Alfred, CEO of Digital Assets Data, told Shen in a phone interview. “Why would you be selling when you’re at the beginning of a wave of potential corporate treasuries and institutional investors coming in?”

Another interpretation, according to Arcane Research, is that traders are taking their bitcoin off exchanges to deploy them in the decentralized finance sector, known as DeFi. Juicy returns can be obtained from tokenizing crypto assets and depositing them as collateral in semi-automated, blockchain-based trading and lending platforms.

As CoinDesk reported earlier this week, tokenized bitcoin has become one of the largest assets on DeFi. Currently, there are more than 108,000 BTC worth some $1.1 billion minted from seven issuers, according to Dune Analytics.

That might be another bullish sign. 

“Bitcoin maximalists would decry the use of bitcoin on Ethereum, arguing that it isn’t ‘real’ bitcoin,” David Derhy, an analyst for the cryptocurrency trading platform eToro, wrote Monday in an email. “I view this development as positive for the sector, as it highlights an evolution within the industry.”

Whatever the case, it’s all there to see.

 

Updated: 9-30-2020

Bitcoin Exchange Reserves Down $5B In 2020 Hints At Whale Accumulation

 

Bitcoin exchange reserves dropped by $5 billion in the past year, showing signs of accumulation.

The Bitcoin (BTC) reserves of exchanges are continuing to drop, which suggests retail investors and whales might be accumulating.

According to data from CryptoQuant, all exchanges’ reserves dropped to 2.4 million BTC, which is equivalent to $25 billion. In contrast, in October 2019, exchanges had around 2.8 million BTC, currently worth $30 billion.

Bitcoin reserves on all exchanges throughout the past year.

There Is A Clear Decrease In Selling Pressure From Whales And Retail Investors

The reserves of exchanges increase when investors deposit Bitcoin. Typically, deposits or inflows are considered selling pressure, because traders have to send BTC to exchanges in order to sell.

Hence, when exchange inflows decline, it often signifies that the appetite to sell BTC by investors is declining.

Another chart from CryptoQuant depicts the trend of net inflows of Bitcoin into exchanges in the same timeframe.

Throughout the past two months, net inflows have generally remained in the negative 20,000 BTC level. Net inflows sharply dropped in recent weeks, specifically as BTC sharply rebounded from $10,300 to above $10,700.

On Sep. 26, Cointelegraph reported that large whale clusters emerged at $10,407. Whale clusters form when whales accumulate new BTC and do not touch the new holdings. Clusters usually indicate that whales are beginning to accumulate in a new area.

Considering the accumulation trend and the resilience of BTC above $10,000, investors likely have little appetite to sell.

Due to the confluence of the lacking willingness to sell BTC at current prices and consistent accumulation, BTC is on track for a strong quarterly close.

Another possible reason behind the steep fall in exchange net flows might have been large-scale hacks. Most recently, KuCoin was reportedly hacked for $150 million after the private keys of hot wallets were compromised.

 

BTC On Track For Its Second-Best Quarterly Close 

According to Skew, Bitcoin is en route to see its second-best quarterly close. BTC closed the second quarter at around $9,140. It would have to stay above $10,600 to secure the second-best quarterly close.

There are several reasons behind the strong performance of Bitcoin throughout the third quarter. Most notably, BTC rallied in tandem with gold and stocks after the U.S. approved a stimulus bill.

The initial kick start of a market-wide recovery from the stimulus, combined with a low-interest-rate environment, created a favorable macro backdrop. The analysts at Skew said:

“One more day to go and still looking like second best quarterly close for #bitcoin but it’s a close call with Q2 2020.”

Throughout the year’s end, there are three key fundamental and macro factors that could buoy Bitcoin’s sentiment, namely the weakening U.S. dollar, the prospect of a stimulus package and vaccines.

Meanwhile, the U.S. dollar is continuing to show weakness against reserve currencies, in the likes of the yen, yuan and franc as the Fed has doubled down on its average inflation targeting strategy. 

But while the prolonged weakness of the dollar might put the U.S. stock market at risk of underperforming against other markets, it should directly benefit Bitcoin and gold, which are priced against the USD.

Updated: 10-14-2020

Five Mega Exchanges Hold 10% Of Bitcoin’s Entire Supply

The Bitcoin ecosystem continues to be dominated by a handful of platforms and companies.

Roughly 10.6% of Bitcoin’s (BTC) circulating supply is currently held on just five centralized exchanges, according to data published by Chain.info.

More than 1.96 million BTC is currently held between the major exchanges Coinbase, Huobi, Binance, OKEx, and Kraken.

Likely owing to its custody services, Coinbase holds by far the most, with 944,904 BTC currently spread across approximately 4.39 million different wallet addresses.

Huobi ranks second with 323,665 BTC held in roughly 901,600 unique wallets, followed by Binance with 289,961 BTC across nearly 2.7 million addresses. OKEx has 276,184 BTC in 339,000 wallets, while Kraken holds 126,510 Bitcoin among 672,000 addresses.

The next seven exchanges — Bitflyer, BIttrex, Bitfinex, Poloniex, Coincheck, Gate.io, and Bitstamp — hold a further 210,000 Bitcoins between them.

The data shows that many users still prefer to accept security risks associated with holding a significant portion of their holdings on centralized exchanges in spite of cryptocurrency’s fundamental ethos of decentralization and mantra of “not your keys, not your Bitcoin”.

The percentage of the Bitcoin supply held on the five centralized exchanges may actually add up to significantly more than 10%, with Chainalysis recently estimating that the 3.7 million BTC that have not moved in more than five years are likely lost. If that’s true, then nearly 15% of Bitcoin’s supply is currently custodied across five centralized platforms.

Updated: 10-18-2020

Bitcoin Exchange Reserves Plunge As BitMEX Bleeds BTC

Bitcoin exchange reserves are continuously plummeting as analysts pinpoint the trend to a potential shortage of sellers.

Bitcoin (BTC) exchange reserves are continuously plummeting as analysts pinpoint the trend to a shortage of sellers. Since the March crash, the reserves on exchanges rapidly fell from 2,950,000 BTC to 2,700,000 BTC.

Within merely seven months, a 250,000 BTC fall in exchange reserves signifies a $2.85 billion decline. Behind the steep trend could be two major factors: a decline in sellers and lower trust toward exchanges.

Is The Number Of Bitcoin Sellers Dropping Amidst An Accumulation Phase?

Analysts mainly attribute the sustained drop in Bitcoin exchange reserves to an overall shortage of sellers in the market.

As retail sellers refrain from selling BTC at current prices, institutions are also acquiring more BTC. The simultaneous drop in selling pressure and an increase in buyer demand is an optimistic trend for Bitcoin.

A pseudonymous trader known as “Oddgems” said the data shows Bitcoin is likely moving from exchanges to non-custodial wallets. If so, it indicates that investors are moving their funds to hold for a longer period. He said:

“More and more #Bitcoin getting out from exchanges and most probably being transferred to non-custodial wallets. This suggests slightly lower liquidity and lower selling pressure going forward.”

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, echoed the stance. 

He emphasized that BTC outflows from exchanges are growing as cash reserves from institutions are flowing into Bitcoin. He noted:

“To be honest, more and more $BTC going from exchanges towards cold wallet storage. Big listed companies allocating cash reserves to $BTC. Is incredibly bullish.”

The confluence of stagnant retail outflows from Bitcoin and the consistent demand from institutions buoy the general sentiment around BTC. 

Dan Tapiero, the co-founder of 10T Holdings, similarly said that “shortages of Bitcoin” is possible due to the surging institutional interest.

Other Supply Metrics Indicate Higher HODLer Activity

According to Glassnode, a large portion of the Bitcoin supply is stored in “accumulation addresses.” These addresses represent users who never moved BTC from their wallets, who are likely storing BTC for the long term.

When “HODLing” activity is high, which refers to holding onto BTC for prolonged periods, it typically indicates the start of an accumulation phase. Glassnode said:

“Bitcoin accumulation has been on a constant upwards trend for months. 2.6M $BTC (14% of supply) are currently held in accumulation addresses. Accumulation addresses are defined as addresses that have at least 2 incoming txs and have never spent BTC.”

The positive fundamental on-chain metrics supplement the favorable technical structure of Bitcoin. Despite various events that could have applied selling pressure on BTC, including the BitMEX probe and OKEx withdrawal suspension, BTC remains above $11,400.

The BitMEX and OKEx controversy also led exchange reserves to decline sharply, possibly spooking traders. Although BitMEX swiftly processed withdrawals and OKEx wallets show no outflows, the regulatory uncertainty was sufficient to cause exchange reserves to slip.

In early October, technical analysts pinpointed the $11,100 to $11,300 range as a critical short-term resistance range. BTC has been relatively stable above the said range, which technically is a positive sign for renewed momentum.

 

Updated: 10-22-2020

For The First Time Since 2018 Bitcoin Balances On Exchanges Fell Below 2.5M

Bitcoin’s balance on three popular exchanges decreased by 390k BTC over the past 9 months.

On October 20, 2020, the amount of Bitcoin (BTC) held at major exchanges fell below 2.5 million BTC for the first time in two years.

Nexo co-founder Antoni Trenchev opined to Cointelegraph that this trend is driven by the world finally realizing that only Bitcoin offers sound monetary policy:

“[People are] slowly are realizing what some of us have known for a while — BTC is the only sound monetary policy right now and you cannot afford to depart from the best performing asset of the decade.”

He also noted that the community is resorting more to self-custody solutions, including platforms like Nexo, where they can “tax-efficiently borrow against their assets rather than selling them.” Cointelegraph noted yesterday that the Bitcoin supply is currently diffused more than ever.

Alex Mashinsky, co-founder of the Celsius crypto lending platform, told Cointelegraph that the exodus will likely continue unless exchanges begin offering better terms to their customers:

“As long as exchanges refuse to give their clients more they will leave them and come to Celsius. We just crossed $2.7B in deposits since launch two years ago. We would not be growing so fast unless we did more to our customers than exchanges.”

From the chart above, we can see that this swing has not impacted all exchanges equally. While balances at BitMEX and Bitfinex were decimated, decreasing by more than half, Binance has continued to accumulate additional funds. Coinbase’s coffers have remained mostly unchanged as well.

The growth of DeFi may have also contributed to this trend. The amount of Bitcoin locked on Ethereum through wBTC and renBTC presently exceeds 130,000. Just a few months ago, these numbers were negligible. Another likely culprit is institutional adoption. Aside from the continuous growth of Grayscale’s Bitcoin Trust Fund, publicly-traded companies like MicroStrategy and Square began adding crypto assets to their treasuries.

It seems that there is either a general trend towards users withdrawing Bitcoin from custodial exchanges, or perhaps a few major exchanges are simply losing the trust of their customers. The latter may be a reasonable conclusion, as a mere three platforms (BitMEX, Huobi, and Bitfinex) were responsible for the bulk of the trend — their balances decreased by 390,000 BTC, making them accountable for almost 80% of the total decline.

Updated: 11-16-2020

$2.3B In Bitcoin Exchange Outflows Dwarfs The Amount Of New BTC Mined

Bitcoin exchange reserves dropped from 2.5 million to 2.355 million in the past month as around 145,000 BTC, worth $2.35 billion, moved out of exchanges.

From Oct. 15 to Nov. 15, Bitcoin (BTC) exchange outflows dropped from 2.5 million to 2.355 million, the lowest levels since August 2018. Approximately 145,000 BTC, worth $2.35 billion at a price point of $16,200, moved out of exchanges.

In the same period, Bitcoin miners mined around 27,000 BTC, equivalent to around $437.4 million.

Since miners have been mining 900 BTC daily after the May 11 halving, 900 BTC times 30 days equals 27,000 BTC.

This aggressive accumulation trend seen in the Bitcoin market shows that investors anticipate a prolonged post-halving uptrend.

Why Declining Bitcoin Reserves Is Bullish

A block reward halving occurs every four years until the fixed supply of Bitcoin at 21 million gets reached.

After each block reward halving, the number of Bitcoin miners can mine per day declines by half. This means prior to the May 2020 halving, around 1,800 BTC were mined. Until the next halving in 2024, 900 BTC will be mined per day.

The amount of available Bitcoin on exchanges is significantly reduced since less BTC getting mined per day alongside rising exchange outflows.

If the demand for Bitcoin continues to rise, then the decline in supply would cause the value of BTC to surge. Hence, many investors might be expecting the price of BTC to see a prolonged uptrend in the medium term.

Bitcoin Hash Rate Rebounds After Huge Difficulty Drop

The growing hash rate of the Bitcoin blockchain is another potential catalyst for BTC heading into 2021.

According to the data from Blockchain.com, the Bitcoin blockchain’s hashrate has recovered in recent weeks following the biggest downward difficulty adjustment since 2011.

The 7-day average hashrate of Bitcoin recovered from 106 million terahash per second (TH/s) to 126 million TH/S between Nov. 3 and Nov. 15.

The Bitcoin hash rate recovering so quickly after the rainy season is an optimistic trend because it suggests that miners are likely expecting the price of BTC to rise in the medium term.

Data Points To Institutions Accumulating

On Nov. 14, Grayscale disclosed that its net assets under management (AUM) reached $9.8 billion. The firm is a mere $200 million away from reaching $10 billion in AUM.

The AUM of Grayscale is a decent metric to gauge institutional activity. The Grayscale Bitcoin Trust has evolved into the go-to investment vehicle for institutions that want to gain exposure to BTC.

Other institution-tailored platforms, such as CME’s Bitcoin futures exchange, are nearing record-high volumes and open interest.

The combination of rising capital inflows into institutional platforms and the decreasing supply of available Bitcoin on exchanges suggest that the demand for BTC is likely increasing as the price gets closer to its all-time high.

Updated: 12-24-2020

$500M In Bitcoin Leaves Coinbase As Institutions Buy More Than Miners Sell

Big money is still scooping up the available Bitcoin supply despite short-term bearish signals, data shows.

Bitcoin (BTC) saw fresh rejection at $24,000 overnight on Dec. 24, but data shows that appetite for big buy-ins is only increasing.

As recorded by on-chain analytics resource CryptoQuant, institution-focused exchange Coinbase Pro alone saw two large withdrawals of more than 12,000 BTC ($278 million) each this week.

Coinbase Outflows Top $550 Million

As Cointelegraph reported, while not proven, single large outflow spikes suggest that a buyer has purchased a large amount of BTC and the proceeds are being moved to a single storage wallet.

“Another big Coinbase outflows a few hours ago,” Ki Young Ju, CEO of CryptoQuant, added in Twitter comments.

“Institutional Investors Are Buying $BTC.”

 

Updated: 1-2-2021

Bitcoin Worth $1B Leaves Coinbase As Institutions ‘FOMO’ Buy: Analyst

On-chain data shows big money continues to chase bitcoin amid the frantic bull run. That’s a sign of institutions catching the “FOMO” bug, according to one analyst.

* Institution-focused Coinbase Pro exchange registered an outflow of over 35,000 bitcoin (BTC, +10.99%) worth more than $1 billion early Saturday, according to data source CryptoQuant.

* The large outflow comes a day after 12,063 coins left the exchange and represents institutional FOMO (Fear Of Missing Out) buying, according to Ki Young Ju, CEO of the Korea-based blockchain analytics firm CryptoQuant.

* Massive outflows from Coinbase Pro usually end in Coinbase’s cold wallets for custody, which is directly integrated with the exchange’s over-the-counter (OTC) desk. Institutions typically transact over-the-counter in a bid to avoid influencing the spot market price, as discussed in December.

* Bitcoin’s rally from October lows near $10,000 has been mainly fueled by institutional demand. The ascent has gone ballistic over the past four weeks, with prices rising from $19,000 to over $30,000.

* While Ju’s claim that institutions are now buying on fear of missing out can be challenged, there is evidence that persistent demand from big players is creating a supply squeeze, allowing for a continued price rally.

* For instance, at least 47,000 bitcoins have left Coinbase Pro in the first two days of the year, while miners have minted just over 1,700 bitcoin. Bitcoin rose from $29,800 to new record highs over $33,000 early today and was last seen changing hands near $31,600.

* The cryptocurrency is already up 10% this year, having scored a 300% gain last year, according to CoinDesk 20 data.

Updated: 1-3-2021

It’s Genesis Block Day. Do You Know Where Your Bitcoin Keys Are?

Today is Bitcoin Day, the anniversary of the Genesis Block that marked the beginning of the Bitcoin blockchain in 2009. This year, with the price of bitcoin shooting for the moon, Bitcoiners have more reason to celebrate – and more reason to assert their sovereignty over their private keys.

An annual event first initiated by Trace Mayer, Proof of Keys is an informal celebration that aims to remind bitcoiners that monetary sovereignty is a fundamental part of Bitcoin’s ethos. It lies at the very heart of the familiar Bitcoiner mantra, “not your keys, not your coin.” In other words, if you don’t control the private keys to your bitcoin (BTC, -0.33%), you don’t really own the coin.

The saying is a reminder that Bitcoin was built to give users complete control over their finances. It’s also a reminder of the potential consequences of trusting your bitcoin keys to a third party (like losing your funds in an exchange hack).

Establishing Monetary Sovereignty

“Anyone who doesn’t want you to hold your own private keys – they’re your monetary enemy. They don’t want you to be free and independent with your money,” Mayer said in the lead-up to 2019’s inaugural event. “That’s just the way it is.”

The implications of being reliant on others to process, exchange and hold your cryptocurrencies aren’t immaterial. They hold acute consequences and compromises of your privacy, and will limit how you interact with your own money.

The Financial Crimes Enforcement Network (FinCEN) gathers extensive personal information on millions of people’s financial transactions, all provided to them by financial institutions, even when those people have not committed any crime.

This year, taking custody of your keys by moving them to a personal wallet takes on an added level of significance. FinCEN has proposed a plan that will force exchanges to comply with new know-your-customer (KYC) requirements when users try to transfer their funds to a personal wallet.

Such a requirement, applicable to any transfered amount over $3,000 in value, threatens to undermine cryptocurrencies’ early promise of privacy and self-sovereignty. (Note: FinCEN is accepting comments from the public on this issue only until Jan. 4, 2021).

Add to this the recent delisting of privacy coins by many exchanges, aforementioned exchange hacks showing no signs of stopping, and other snafus like absent exchange keyholders inadvertently freezing transactions: Assuming control of your own private keys and becoming the first and last line of control when it comes to your crypto is even more imperative.

The most basic way to exercise your monetary sovereignty is to hold your private keys in your own, non-custodial bitcoin wallet. This means taking any bitcoin you own out of exchanges and custodial wallets and transferring the keys to a wallet that you control.

Proof of Keys

Proof of Keys takes the notion of self-sovereignty even further by adding the adage, “Not your node; not your rules.” The point here is that it is equally important to withdraw your keys to a bitcoin node that you are running. This way, you can perform your own validation yourself, without having to trust other people’s nodes to prove that your keys are your own.

Participants in Proof of Keys usually pledge to take possession of any private keys on or before Jan. 3. On Twitter, this pledge is denoted publicly by the addition of series of symbols to their user name or profile: [Jan/3➞₿????∎] The date, arrow, Bitcoin unicode and key represent their intent to hold their keys. The block signals that they have completed the verification process.

Casa’s KeyFest

Self-custodying your keys can be a tricky proposition for the uninitiated – and even for some who have been holding bitcoin for a long time. To help people safely take control of their private keys, Casa is hosting its first KeyFest, a three-day virtual conference from Jan. 5 through 7.

Each day will feature a new webinar, followed by a workshop to instruct users on different ways they can custody their bitcoin. Speakers include Blockstream CEO Adam Back, Balaji Srinivasan and Avanti co-founder Caitlin Long, among others.

Updated: 1-4-2021

FT Reveals Bitcoin Headline On 12Th Anniversary Of Genesis Block

A timely tribute to the king of cryptocurrency features alongside a coronavirus headline, which says it all about the fiat economy in the 12 years since 2009.

Bitcoin (BTC) received a fitting yet accidental birthday present on Jan. 4 as the Financial Times made it front-page news on the 12 anniversary of its genesis block.

Released on Monday, the FT’s upcoming headline had already made the rounds on crypto social media prior to publication. 

12 Years Later: No Bailouts, Just Bitcoin

The left-hand column of the front page was dedicated to Bitcoin’s price surge, while the accompanying price chart made it as the paper’s lead image.

The timing could not have been any more conspicuous, coming just one day after Bitcoin celebrated its 12th birthday. On Jan. 3, 2009, another mainstream newspaper, United Kingdom-based The Times, led with the now-infamous headline “Chancellor on Brink of Second Bailout for Banks,” which was added to Bitcoin’s first block of transactions, also known as the genesis block.

Keeping Bitcoin company in 2021 was a headline, which some may argue is just as fitting, relating to coronavirus lockdowns — something that has wrought huge economic damage and sparked money printing on an unprecedented scale.

Unsurprisingly, proponents of Bitcoin as sound money and an escape from fiat inflation were in a celebratory mood as the FT headline went public.

“On the 1st business day of 2021, #Bitcoin takes its rightful place atop the Financial Times,” Michael Saylor, CEO of MicroStrategy, summarized to Twitter followers, adding a quote by French author Victor Hugo.

Just published: front page of the Financial Times international edition Monday January 4 https://t.co/0ANz1YQw27 pic.twitter.com/lN2t2CBKVU

— Financial Times (@FinancialTimes) January 3, 2021

Crypto Leaves Classic Assets In The Dust In 2021

As Cointelegraph reported, Bitcoin has already set itself apart as a macro investment in 2021, having beaten traditional assets outright in just four days. Much the same was true for 2020 and most years before, with only other cryptocurrencies and later Tesla stock providing meaningful competition.

“Bitcoin and Ether $ETH are already the biggest hits of 2021,” Gemini exchange co-founder Tyler Winklevoss tweeted as the week began.

Jan. 3 also saw a marked decline in exchange balances, reminiscent of a publicity effort by Bitcoin OG Trace Mayer over the past three years.

Dubbed “Proof of Keys,” Mayer appealed to investors to remove their coins from exchanges en masse on the same day in January as a means of taking control of one’s finances and abiding by the Bitcoin ethos of “being your own bank.”

Updated: 1-20-2021

Going Long: 270K Bitcoin Moved Into Storage In A Month

Investors are in it for the long run, locking 270,000 BTC away over the last 30 days.

Despite surging prices, Bitcoin investors are rapidly locking up their BTC for the long-term, with 270,000 BTC being taken out of liquid supply in the last 30 days.

According to data published by crypto market data aggregator Glassnode, “liquid” Bitcoin wallets have shed 270,000 BTC over the past month, up from 175,000 Bitcoin at the start of January.

The data shows that Bitcoin’s (BTC) liquid supply has consistently fallen over the last nine months, with liquid supply currently sitting at 21.3% and showing no signs of reversing.

Bitcoin’s increasingly illiquid supply could be bullish for its price, with new retail and institutional traders vying for an increasingly diminishing supply. Glassnode estimates that nearly 80% of the 18.6 million circulating Bitcoin are currently stored in “illiquid” wallets.

According to Glassnode, a Bitcoin wallet is considered illiquid if less than 25% of the Bitcoin received has been transferred out across the entity’s life. In contrast, to be deemed highly liquid, the majority of Bitcoin must be transferred back into circulation, with less than 25% of the inflows held onto.

Of the 3.9 million BTC Glassnode describes as being highly liquid, 61% or 2.38 million is held by centralized exchanges. Their balances have also been dropping, with data from analytics firm CryptoQuant indicating exchanges’ reserves have shrunk by 13.8% since July.

Increasing institutional investment may be a significant force driving the depletion of Bitcoin’s liquid supply, with wallet tracking service Bitcoin Treasuries currently estimates that 33 institutional entities have accumulated more than 1.2 million BTC or 6.5% of Bitcoin’s circulating supply.

In the last few days, Grayscale has increased its holdings by approximately 25,000 BTC with a portfolio of 641,523.7 BTC as of January 20, 2021. To put this in perspective, approximately 900 Bitcoin are minted each day. According to Glassnode, however, on average only one-third of those are actually being sent to exchanges since July 2020.

Data from Investment firm SwissBorg shows that in the second half of 2020, institutional investors purchased on average more than 230% of the newly minted BTC. Adding in the purchases from PayPal and Square (along with the estimated amount of Bitcoin lost each day) demand could be running as high as 500% of the new supply.

Earlier today, the world’s largest asset manager BlackRock filed with the SEC, listing Bitcoin Derivatives as a possible investment. The firm entered 2021 with $7.81 trillion in assets under management, more than seven times crypto’s entire market cap.

Updated: 3-8-2021

The Number Of BTC Held On Exchanges Crashed 20% In 12 Months

Long-term accumulation and the increasing popularity of DeFi yield protocols is siphoning Bitcoin away from centralized exchanges.

Data from on-chain crypto information aggregator Glassnode indicates the number of Bitcoin held on centralized exchanges has fallen by roughly 20% in 12 months.

The data suggests investors are accumulating BTC and withdrawing them from exchanges into cold storage, creating a supply crunch.

#Bitcoin Balance on Exchanges taking another dive pic.twitter.com/F20tohfXsu

— William Clemente III (@WClementeIII) March 7, 2021

On March 6, Glassnode also shared data revealing that coins purchased during 2021 were not moved at a loss during the late February dip, according to on-chain analysis.

The firm’s “Hodlwaves” metric, which measures the time since coins were last moved on-chain, also points to increasing accumulation activity. Hodlwaves data published on Feb. 22 indicated 57% of Bitcoin’s supply has not moved in more than one year. However, more than one-third of said BTC have not moved in more than five years, suggesting that a significant portion of the coins may have been lost.

The increasing popularity of decentralized exchanges and DeFi yield protocols may also be driving the diminishing supply of BTC on centralized exchanges.

Evidencing strong demand for Bitcoin in the DeFi ecosystem, the total value locked, or TVL, of BTC tokenization protocol Wrapped Bitcoin has increased by more than $1 billion since the start of March, according to DeFi Llama.

Updated: 5-27-2021

Bitcoin Outflow From Exchanges Suggests Confidence Crypto Rout Is Over

The fewer coins available for sale on exchanges, the better the chance of markets rising.

With blockchain data showing bearish market sentiment is weakening, oversold bitcoin may succeed in establishing a foothold above $40,000. The cryptocurrency crossed above the psychological hurdle soon before press time, having put in lows near $37,000 during the Asian hours.

* The seven-day average of net bitcoin inflows to exchanges turned negative for the first time since April 22, data provided by Glassnode show.
* That means coins are leaving exchanges after a gap of four weeks, a sign of investors are starting to take direct custody of their holdings, possibly anticipating a price increase.
* The fewer coins available for sale on exchanges, the better the chance of the market going up.
* Investors typically transfer coins to exchanges when they want to sell their holdings, so consistent net inflows represent a bearish mood, with outflows signaling bullish sentiment.

* The seven-day average of net flows turned positive on April 22, and rose to a 14-month high of 10,628 BTC on May 17, a sign some holders may have been panicking.
* The bitcoin sell-off gathered pace, with prices dropping to lows near $30,000 on May 17. The decline marked a slump of more than 50% from the record-high $64,801 reached on April 1.
* The panic looks to have subsided this week, with the balance held on exchanges dropping by 7,597 BTC to 2.53 million.
* Further outflows from exchanges may be needed to restore battered market confidence and put the cryptocurrency back on a bullish path.
* Consistent outflows accompanied bitcoin’s 13-month surge from $5,000 to over $60,000, with the balance held in exchange wallets falling by more than 615,000 BTC from March 2020 to April 2021.

Updated: 6-8-2021

Crypto Exchanges See Biggest Bitcoin Outflow In 7 Months. A Reason To Cheer?

“This traditionally bullish signal should be interpreted with caution and in the context of other indicators,” one analyst said.

With the price of bitcoin off almost 50% from its all-time high, bullish traders are hanging their hopes on a fresh data point that might show the market is nearing a bottom: a big surge in outflows of the cryptocurrency from exchanges.

While it’s too early to tell if the outflows will be sustained, the data might indicate that some traders are satisfied with the current price and have no intention of liquidating their bitcoin (BTC) on the exchanges. In the logic of cryptocurrency markets, the traders might be moving their coins to wallets, custody or cold storage while awaiting the price of bitcoin to rebound.

Crypto exchanges registered a net outflow of 22,550 BTC on Monday, the biggest single-day net drain since Nov. 2, 2020, according to data provider Glassnode. The blockchain analytics firm tracks flow from 13 bit cryptocurrency exchanges, including Binance, Coinbase and Kraken.

“The outflow can best be described as multifaceted, bordering on HODLing, and the use of the digital currency in decentralized finance,” Petr Kozyakov, co-founder and CEO at the global payment network Mercuryo, told CoinDesk. To “HODL” is crypto-market slang for buy and hold.

The number of bitcoins held in exchange wallets fell to a three-week low of 2.54 million from 2.56 million.

Investors typically move coins from exchanges to wallets, taking out liquid supply from the market when they intend to buy and hold in anticipation of price rallies.

“Investors appear to be storing their assets in hardware wallets with anticipation that the current drop in price will balance out for new price runs toward and above its previous all-time high,” Kozyakov added.

Some investors take direct custody of bitcoin and tokenize the coins on the Ethereum blockchain to earn extra yield. Tokenization refers to locking up bitcoin on Ethereum and issuing an equivalent number of tokens tied to bitcoin’s price. The tokens can then be deposited in decentralized finance (DeFi) lending and borrowing protocols.

“With bitcoin in DeFi, investors get to maximize their earnings amidst dwindling prices, a better option for many who prefer not to keep their assets idle,” Kozyakov said.

Data from the website DeFi Pulse shows total bitcoin locked in smart contracts has grown from 94,000 in April to about 174,000 now.

Such tokenization of bitcoin on other networks is also a source for the reduction of supply in the market.

All things considered, the latest outflow of bitcoin from centralized exchange paints a bullish picture. However, Jason Deane, an analyst at Quantum Economics, called for a cautious approach.

“The market is currently lacking direction, sentiment is mixed, and many metrics are reporting lower demand, so this traditionally bullish signal should be interpreted with caution and in the context of other indicators,” Deane said.

Bitcoin is currently trading near $33,000, representing a 1% drop on the day. The price fell by 35% in May on environmental concerns and China’s regulatory crackdown.

While exchange outflows have picked up, demand from “whale” entities – those with sizable holdings whose actions can theoretically move the market – remains muted at best. While the supply held by entities holding 1,000 to 10,000 coins has increased by 35,000 BTC to 4.183 million this month, the tally remains below the May 24 high of 4.186 million.

A sustained increase in supply held by whale entities may be needed to restore the battered market confidence. The balance held by these large investors rose in tandem with the price throughout the bull run from October 2020 to April 2021.

 

Updated: 7-29-2021

Record 57K BTC Leave Exchanges In One Day, Dropping Bitcoin Reserves To Pre-Crash Levels

57,000 BTC leaves exchanges in a single day as demand returns with Bitcoin at the upper end of its multi-month trading corridor.

Bitcoin (BTC) demanded a $40,000 resistance flip on Thursday as on-chain data revealed large withdrawals from exchanges.

Exchange Balances Shed 57,000 BTC

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rise to challenge the upper end of its trading range once more on Thursday.

The pair had seen a pullback after initially hitting multi-week highs of $40,600 on Bitstamp earlier in the week.

Bottoming out at $38,800, Bitcoin then returned for its latest trip to the $40,000 mark, with that level still to be flipped to support convincingly at the time of writing.

Amid concerns over the strength of this week’s rally, data on Thursday nonetheless pointed to genuine demand for BTC at higher prices.

Shared by Bybt and CryptoQuant, the data appeared to show the largest one-day outflow in at least a year. A total of 57,000 BTC left exchanges in 24 hours.

With that, exchange balances returned to levels last seen in mid-May, just before a major price correction after Bitcoin began reversing from all-time highs of $64,500.

In Search Of Solid Support

Despite this demand, however, market participants remained convinced of the need for a higher low construction on BTC/USD before any higher levels could fall.

“I think market needs to go down to put in a HL before continuing up,” popular Twitter trader Pentoshi summarized.

“To put it simply. Been bullish from 29.6k into resistance but today to me signals need to go down for higher low.”

Exactly how low that higher low will be could be anywhere between $36,000 and $32,500, Cointelegraph reported.

Order book data from major exchange Binance, meanwhile, confirmed a narrowing range for spot price, with buyers and sellers encroaching on $40,000 from both sides.

Updated: 8-2-2021

What Does Last Week’s Steep Drop In Bitcoin’s Balance On Exchanges Really Mean?

As the bitcoin market grows bigger and changes, blockchain data also becomes more complicated to interpret.

The amount of bitcoin being held across all exchanges fell sharply last week, a sign that based on past experience was taken a positive for the bitcoin market.

But the changing dynamics of the market show that as the crypto market grows bigger, relying on just one or two metrics can’t always reveal the full story of what’s going on.

Data from blockchain data firm Glassnode shows that the balance of bitcoin on all exchanges fell 4.1% to 2.48 million from 2.587 million in the last four days of July.

The market’s initial reaction to the drop was positive, because as recently as last September, a decrease in the number of bitcoin held on all exchanges came at the same time as a price rally.

The presumed logic is simple: More BTC was moved off exchanges, potentially to cold storage wallets, as investors became more bullish about the long-term value of their bitcoin holdings.

But after analysts took a closer look at the data, particularly given that the recent drop was much steeper than the previous one, they said that the decline may not necessarily reflect just bullish sentiment.

It is “really hard to know what’s happening with just one dimension,” Willy Woo, an independent blockchain data analyst, told CoinDesk. “As the network changes, the measuring stick does along with it.”

Indeed, just as the market started noticing the drop, crypto exchange Kraken, for example, announced last week that the bitcoin balance drop on its exchange was the result of its internal transfers, which immediately damped some of the initial excitement.

“We can’t confirm that the drop is not entirely due to exchanges’ internal transfers,” Philip Gradwell, chief economist at blockchain data firm Chainalysis, said. “Some are, but not all, and potential withdrawals need to be observed for longer to see if they are genuine withdrawals.

“This makes giving definitive statements on exchange balances far back in the past pretty tricky,” he concluded. “We are working on an improvement to understanding this.”

Clara Medalie, research lead at blockchain data firm Kaiko, said that while it is easy to tell which addresses belong to an exchange, many more entities such as over-the-counter (OTC) desks and brokers associated with the exchanges are receiving lots of bitcoin.

“Thus, it is difficult to actually measure an exchange outflow because these transfers very well could just be being sent to other exchanges or trading desks, or simply between addresses on the same exchange,” Medalie said.

Bullish, But Conservatively Bullish

Some argue, however, that by also looking at a few other blockchain data metrics, last week’s drop in bitcoin’s balance on exchanges might still reflect a bullish market sentiment by large.

Woo told CoinDesk that when the drop took place last week, the holdings of the cohorts owning small, medium and large amounts of bitcoin increased, showing some aggressive purchases by both bitcoin whales (large holders) and smaller investors.

As CoinDesk reported, the actual number of BTC available for trading is much lower than bitcoin’s current supply at 18.77 million, or 89% of the 21 million cap, because of increased hoarding by investors and the permanent loss of mined BTC over the years. A decline on BTC’s balance on exchanges and increased BTC balances of holders across their wallet addresses indicate that some of the coins were sold to buyers off the exchanges.

“The largest of the whales may be exchanges that were previously thought of as distinct separate entities, when now we discover in effect they were exchanges all along,” Woo said. “‘Shrimps (bitcoin holders with less than one BTC) to smaller whales all increased their holdings … These guys are unlikely to be exchanges, so it validates most of the coins that left exchanges are real.”

As data from Glassnode shows, in the past two weeks, the total circulating supply held by entities with different amounts of BTC all increased, with the exception of entities with balances between 100 and 1,000 BTC, and those with balances of more than 100,000 BTC.

“When I see big outflows like this, I think that traders ‘like the price’ and are willing to hold over a longer time period,” George Kaloudis, research associate at CoinDesk, said. “It certainly shows that investors are more willing to weather the storm in the near-term given the friction of moving funds back on exchanges to liquidate.”

Changes In Preferred Exchanges

The outflows of bitcoin balance on exchanges, based on analysis by Chainalysis, is also a case-by-case situation, an indication that some investors and traders may have changed their preferred platforms for trading and other crypto activities.

As the chart below shows, the drop in the number of bitcoin held on crypto-to-crypto exchanges was much steeper than the drop in bitcoin balances on crypto-to-fiat exchanges since May 1.

“I think much of the bitcoin that has been withdrawn is moving exchanges, as people change which exchanges they trade on,” Gradwell said.

Even though it is not clear what has triggered the change of preferred crypto exchanges by traders and investors, Binance, the most popular crypto exchange by trading volume, has faced tougher regulatory actions in countries around the world.

Bitcoin’s recent outflows from exchanges “was presumably catalyzed by Binance’s announcement of dramatically lower withdrawal limits for non-KYC (know-your-customer) customers,” blockchain research firm Delphi Digital wrote in its daily market update on July 29, which also noted that Binance and Coinbase were the top two exchanges in terms of absolute outflows.

Binance also said that its users in Germany, Italy and the Netherlands won’t be able to open new futures and derivative positions on the platform.

On the other hand, the shift in preference for crypto-to-fiat exchanges also could signal that new investors in crypto are more comfortable with bitcoin investments only, according to CoinDesk’s Kaloudis.

“We are seeing new entrants to the bitcoin market who are presumably less comfortable trading across cryptos in general, [which is] theoretically more bullish for bitcoin adoption,” he said.

 

Updated: 8-5-2021

Bitcoin Outflows From Centralized Exchanges Surge To 100K BTC Monthly

Centralized exchanges have experienced their heaviest week of Bitcoin withdrawals since November 2020.

Bitcoin (BTC) outflows from centralized exchanges have surged to their highest level year-to-date, with roughly 40,000 BTC being withdrawn over the past seven days.

According to Glassnode’s Monday “The Week On-Chain” report, Bitcoin outflows have accelerated to a rate exceeding 100,000 BTC per month for just the third time since September 2019. The on-chain analytics provider estimates that just 13.2% of circulating BTC is currently held on exchanges — a new low for 2021.

“This represents a near full retracement of the significant inflow volume observed during the May sell-off,” the report noted.

Outflows surged to nearly 150,000 BTC monthly at the end of April 2020 following the violent “Black Thursday” crash that saw crypto prices tumble by more than 50% in less than two days after then-United States President Donald Trump announced a travel ban between Europe and the U.S. in March as the coronavirus pandemic intensified. Despite the aggressive crash, Bitcoin had rebounded by 150% by the end of May 2020, driving heavy accumulation.

Outflows again came close to 150,000 BTC monthly in November 2020 as Bitcoin surged to test its then-record price high of $20,000, with BTC rallying into new all-time highs the following month.

Glassnode notes divergent trends between Coinbase and Binance throughout most of 2021, with Coinbase having experienced significant outflows, while Binance has been the largest recipient of BTC.

However, Binance’s reserves are now beginning to dwindle, with 37,500 BTC (worth roughly $1.5 billion) exiting the exchange over the past week.

Coinbase balances remained steady in June. While the exchange received 30,000 BTC in mid-July, 31,000 BTC was withdrawn from the platform this past week.

Looking at the macro sentiment, the on-chain analytics provider referred to its “Liveliness metric” to identify trends in accumulation.

The metric, which measures the ratio of the sum of coin days destroyed and the sum of all coin days ever created, indicates a broad trend of accumulation following May’s immediate sell-off.

“It seems that HODLing and accumulation is the most likely dominant trend in the on-chain market,” the report concluded.

 

Updated: 9-1-2021

Coinbase’s Bitcoin Reserves Drop To The Lowest Level Since December 2017

BTC price action stays frustratingly dull as altcoins take the chance to put in a serious performance, led by Ether.

Bitcoin (BTC) revisited weekly lows on Wednesday as the new month got underway with a fizzle rather than a bang.

Bitcoin Lingers In “Price Stability”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting lows of $46,530 on Bitstamp overnight, its lowest since Friday.

With $50,000 out of reach, price action continued to diverge “remarkably” from strong on-chain metrics and fundamentals.

For analyst Willy Woo, who echoed similar findings from this week, a large pool of support at current levels is likely to hold Bitcoin where it is. Over 1.65 million BTC has a cost basis between $45,000 and $50,000.

“Bitcoin approaching another region of notable price stability,” he told Twitter followers Wednesday.

“Short term technicals are weak while on-chain, investors are in accumulation. All the makings of a volatility squeeze. Breaking 50 likely a fast track to 60.”

The area around $51,000, which this week remains active as a “final hurdle” resistance level for Bitcoin, is widely tipped to crumble in the mid-term, but the exact timing of such an impulse move is a mystery.

Investors seemed ready to go on the day, with reserves on major exchange Coinbase at their lowest levels since December 2017 — 700,000 BTC — and almost $20 billion in stablecoins sitting across centralized trading platforms ready for conversion.

“After a period of moderate BTC inflows following the May Sell-off, Coinbase has seen a large outflow of coins,” on-chain analytics firm Glassnode commented on the data.

Ether Leads Altcoin Boost

For Cointelegraph contributor Michaël van de Poppe, however, it was business as usual for a BTC consolidation.

“Yep, Bitcoin is following this path,” he summarized.

“Overall; pretty normal consolidation resulting in altcoins breaking out heavily with Ethereum as the first one breaking to new highs.”

ETH/USD passed $3,500 overnight, marking its highest in three months against the United States dollar and BTC. Its cryptocurrency market capitalization dominance rose to 20.4%, with Bitcoin’s steady at 44%.

Updated: 9-14-2021

Bitcoin Exchange Reserves Lower Than November 2020

It’s a question of “if,” not “when,” for Bitcoin to see a supply shock that squeezes price action upward, one analyst forecasts.

Bitcoin (BTC) preserved a higher low overnight on Tuesday in what one analyst believes may lead to sustained recovery.

Time For “Inevitable” Bitcoin Supply Shock

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising to rechallenge $46,000 Tuesday.

The pair had been drifting south before a sudden bout of volatility produced lows of $43,380 on Bitstamp. At the time of writing, these remained untested, with Bitcoin gaining around 5.5%.

“This could be a macro HL for $BTC. It acted as support before,” popular trader Pentoshi summarized about the area immediately below around $45,300.

“We took out the HL from the Macro down trend then climbed w/o any notable pullbacks for weeks. As long as we are above 41k we are bull. Btc has a way of looking shit and then surprising everyone.”

Pentoshi had stayed cautious on Monday, in line with expectations from analysts who demanded a daily higher low to preserve overall market strength.

Not only is #BTC still finding support here…

But it has also formed an early-stage Higher Low$BTC #Crypto #Bitcoin https://t.co/thtalKabfm pic.twitter.com/fBPbCPT7BH

— Rekt Capital (@rektcapital) September 14, 2021

Overall, however, there remained plenty to be bullish about longer term.

“Bitcoin exchange reserves are getting to very low levels. That’s a signal that we’ve got more and more holders,” Cointelegraph contributor Michaël van de Poppe noted.

“The inevitable is still about to happen -> heavy supply shock upwards in which we’ll get a big run to higher numbers.”

Data from on-chain analytics firm CryptoQuant confirmed that exchange reserves hit new multi-year lows this week, even beating the start of the main bull run phase in November 2020.

Altcoins Rise In Line With Strengthening Bitcoin

Altcoins also painted a more positive picture Tuesday, with all of the top 10 cryptocurrencies seeing at least 3% gains.

They were led by Solana (SOL) and Polkadot (DOT), which both saw closer to 10% returns.

The largest altcoin, Ether (ETH), was recovering, passing $3,300 while still down 14% compared to the same time a week ago.

Updated: 10-15-2021

Bitcoin Gets Green Light For Price Discovery With ‘Almost No Supply’ On Exchanges Above $59K

Resistance is thinner than ever, while data leaves the market guessing about what will happen when Bitcoin revisits $64,500 all-time highs.

Bitcoin (BTC) is now free to surge not only to existing all-time highs but beyond, analysts have said.

Analyzing orderbook data on Oct. 15, monitoring resource Whalemap revealed that Bitcoin had already beaten all major resistance levels.

Bitcoin Is Already Moving In Thin Air

With $60,000 hitting for the first time since April, the odds are on for new all-time highs — and the timeframe for these keeps getting smaller.

Now, a look at exchange conditions shows just how easily BTC/USD should jump into uncharted territory beyond $64,500.

“Price discovery shall commence very soon,” Whalemap commented on a chart showing BTC supply levels by price.

“Almost no supply at prices above 59k.”

Short Squeeze Or Resistance Slap At $64,000?

The only hurdle left is a sell-wall at the current highs, something which has been countered by bullish data about the origins of the current bull run phase.

According to Ki Young Ju, CEO of on-chain analytics firm CryptoQuant, Bitcoin’s recent price surge is not the result of speculators or shorts being “squeezed” out — but large-volume buyers on derivatives platforms.

This firmly differentiates Q4 from earlier phases, notably that which produced the all-time highs from the start of 2021 onward.

As such, a classic “short squeeze” scenario, where bears are wiped out in a cascading ascending price structure, has yet to even happen.

“Massive BTC buying market orders in derivative exchanges are not from short liquidations,” Ki wrote in a blog post on Friday.

“This indicates: 1/ There are no big short positions liquidated so far 2/ Whales punted long positions since the dip.”

Updated: 10-20-2021

Bitcoin Price Eyes $65K Breakout As BTC Exchange Reserves Fall To 2018 Lows

Decreasing reserves mean a decline in Bitcoin supply for selling, altcoin purchasing and margin trading.

Bitcoin’s (BTC) ongoing price rally above $64,000 has coincided with a substantial drop in its reserves across all exchanges.

According to data provided by CryptoQuant — a South Korea-based blockchain analytics service — the amount of Bitcoin held in exchanges’ wallets dropped to as low as 2.379 million BTC earlier this week, the lowest in more than three years. Currently, the reserves are around 2.38 million BTC.

CryptoQuant noted that the declining Bitcoin reserves showed the availability of fewer BTC tokens “for selling, altcoins purchasing, and margin trading.” Additionally, that also reflected traders’ intention to “hodl” the cryptocurrency.
Demand for Bitcoin grows among whales and fishes

On the other hand, the cryptocurrency’s demand appears to have been increasing across retail and institutional traders, with the number of wallets holding more than $100 and $10 million worth of BTC reaching their record high of 16.67 million and 10,510, respectively.

On-chain analyst Willy Woo published a report in August 2021 that discussed Bitcoin’s “supply shock” against its rising demand, concluding that the cryptocurrency’s per-token worth should be at least $55,000.

The “conservative” target remained lower than pseudonymous analyst PlanB’s $135,000 price projection by the end of 2021, based on his stock-to-flow model.

$63K✅ https://t.co/tj6SSwSzKR

— PlanB (@100trillionUSD) October 19, 2021

Meanwhile, PlanB’s Bitcoin price prediction for November 2021 sits around $98,000, above $70,000, the most preferred strike target for the options expiring on Nov. 26, as shown in the chart below.

BTC Price Macro Fundamentals

Bitcoin’s bullish on-chain fundamentals are likely to see further strength from Wall Street adoption.

On Tuesday, ProShares became the first exchange-traded product firm to launch a Bitcoin futures-based exchange-traded fund (ETF) on the New York Stock Exchange. In a milestone for Bitcoin investing opportunities, the listing opened a new road for institutional investors to gain exposure to BTC.

For instance, Fundstrat Global Advisors co-founder Tom Lee said he anticipated Bitcoin ETFs to attract at least $50 billion in the coming 12 months, reasserting his team’s year-end $100,000 price target for BTC.

Technically, Bitcoin appeared to be heading toward its record high near $65,000, now acting as a resistance level.

On the flip side, Bitcoin’s relative strength index (RSI), a momentum indicator that analyzes an asset’s overbought/oversold signals, reported the cryptocurrency price as excessively high on the daily candle chart, suggesting that a pullback is on the table.

Should a correction happen, Bitcoin’s next support target could be near $57,500, which serves as the 78.6% Fib level of the Fibonacci retracement graph, drawn between the $65,000 swing high and the $30,000 swing low.

The level also coincides with Bitcoin’s 20-day exponential moving average (the green wave in the chart above). The said level has earlier acted as strong support during Bitcoin’s uptrend.

Updated: 4-25-2022

Crypto Exchanges See Record Outflows Of Bitcoin Into Cold Storage!

“We have only seen this level of outflow from exchanges four previous times since the start of 2018,” the analysts wrote in a note. “Three of those instances correlated with a sharp upward movement in price not too long after.”

A lot of the coin’s supply has been moving into long-term-holder accounts. Analysts at Blockforce Capital, who used Glassnode data, cite the “massive amount” of the coin that’s been coming off exchanges recently — that gets taken “offline” and put into cold storage, meaning it’s not likely to be traded.

The number of illiquid coins is not just growing, but the rate at which it’s doing so is accelerating too.

Bitcoin ‘Stuck At The Moment’ As Record Cash Flees Crypto ETFs

* April Is Set To See The Largest Crypto Fund Outflows On Record
* People Showing Little Interest Because It’s Too Volatile: UBS

Bitcoin seems to be stuck in a rut: Prices are flagging, online searches for the largest cryptocurrency and other digital assets have fallen off, fewer and fewer coins are changing hands, and crypto-related funds are seeing massive outflows.

In fact, a UBS analysis of around 160 products shows April is set to see the largest crypto-ETF outflows on record, with investors having pulled more than $417 million so far this month. A Bitcoin product from Purpose alone has seen more than $220 million come out since the end of March.

In other words, the latest bout of crypto fever seems to be breaking, much as it did after the boom and bust of 2017 and 2018. The space is also no longer notching the huge influx of new investors that it had seen in the past two years.

“The vast majority of the population seem to have little interest in crypto because it’s too complicated, too volatile, too strange,” James Malcolm, head of foreign exchange and crypto research at UBS, said by phone. “So in a sense, we’re stuck at the moment.”

Cryptocurrencies, just like other assets considered to be riskier or more volatile, have sold off this year as central banks around the world raise interest rates to fight persistently hot inflation. Bitcoin peaked near $69,000 in November before a selloff commenced, and it hasn’t been able to recover. It’s down roughly 40% since reaching that record.

Aggregated trading volumes across crypto exchanges like Coinbase and Kraken have also fallen off as interest remains muted and the flow of new investors dries up.

Meanwhile, Google searches for the word “Bitcoin” have also declined, and social-media activity via the Crypto Subreddit — as measured by things like comments and posts per day — is down from mid-2021 levels.

So what needs to happen for interest to perk up again? UBS’s Malcolm says industry participants want greater regulatory clarity, something that might still be a long way off. If prices started to rally again, investors could return.

“It either needs new people or it needs existing players to dedicate an increasingly large slice of resources to the industry,” he said.