Since December 2017, it has not happened that so few Bitcoins can be traded on exchanges. Only 5.38%^ of all Bitcoins can still be traded freely on exchanges. In theory, this should be good for the price, because the rarer something is, the more valuable it can become.
The less the better for Bitcoin
In short: it is good that there are fewer and fewer Bitcoins available on exchanges. This is because the amount of Bitcoin available for sale is decreasing. This could lead to a rise in the price of Bitcoin as there is less demand to maintain the price.
There are several reasons why people withdraw Bitcoin from exchanges. One of the reasons is that they want to store Bitcoin in a cold wallet, an offline wallet that is more secure than an online wallet. Another reason is that they want to use Bitcoin to pay for goods or services. And another reason is that they want to hold Bitcoin as an investment.
Little confidence in the stock markets
But there is another important reason why people withdraw their Bitcoins from exchanges: they no longer trust the exchange. Remember, FTX collapsed last year and Binance is not doing well. Several stock exchanges have left the Netherlands.
The FTX crash resulted in the disappearance of billions of dollars of cryptocurrencies. Recently, the world’s largest cryptocurrency exchange, Binance, also fell into crisis. Americans accuse the company of money laundering.
Binance agreed to a minimum fine of $4.3 billion. In addition, previous CEO Changpeng Zhao (CZ) resigned and was replaced by Richard Teng.
Lowest level since December 2017
The trend of less Bitcoin on exchanges has been around for several years. In 2023, the share of Bitcoins available on exchanges fell to 5.38%. This is the lowest percentage since December 2017, he said Santíment data. This percentage indicates how many Bitcoins are on exchanges.
It is of course not certain that the price of Bitcoin will rise if there are fewer and fewer Bitcoins available on exchanges. There are other factors that can influence the price of Bitcoin, such as general economic conditions and investor sentiment. However, in general, it is a positive sign if there are fewer and fewer Bitcoins available on exchanges.
Source: BTCDirect
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
