Heist on cryptocurrency exchanges : 110,000 bitcoins are gone, and that's just the start

By: Bharggavi Ssayee

August 27, 2021 6:53 AM

If, in 2020, the cryptocurrency exchanges saw the stock of bitcoins (BTC) in their custody melt like snow in the sun - with a total holding reduced by 643,000 BTC -, the year 2021 will have been relatively lenient until 'here. However, for about thirty days, it has been the hemorrhage again: bitcoins disappear from crypto-exchanges to go and settle down warm on private wallets.

A billion dollar capital flight

To ensure, among other things, good liquidity of the exchanges, crypto exchanges like to have as much BTC as possible on hand, although it is not their tokens to legally speak of (although in a technical sense, they do have custody of them. private keys).

As the @WClementeIII Twitter account rightly points out, the exchanges have especially had to start sweating again in recent weeks, as they can only helplessly witness the rather massive bitcoin withdrawals from their customers.

Crypto-exchanges have indeed lost a net total (balance between entries and exits of BTC) of 111,033 bitcoins over the past 30 days, i.e. the exodus of just over $ 5 billion of capital at the current price. .

A phase change for Bitcoin investors?

While 2 periods of larger massive BTC withdrawals had already been observed in 2020, the current movement is the strongest of 2021 and remains the third largest in Bitcoin's history on trading platforms.

As can be seen in the graph below from Glassnode, the BTC market has gone through several phases with different dominances on the exchange flows.

Glassnode thus interprets the regular net bitcoin outflows at the end of 2020 as a phase of investor accumulation, while the intense entry / exit exchanges (almost in balance) in the first months of 2021 correspond to a bull market phase. , with regular profit taking by some investors.

With Bitcoin's price falling since mid-May 2021, a phase of fear and capitulation among investors marked a brief mass return of BTC to exchanges. Conversely, with the recent rally in BTC prices above $ 40,000, a new phase of accumulation (and therefore bitcoin withdrawals) seems to have been triggered by this uptrend.

Even if it is still far too early to say if the price of Bitcoin and the crypto market are on the rise again for good, it should be noted that this monitoring of the inflows / outflows of BTC from the exchange platforms seems very relevant. to know the market trend. This, combined with the good omen of a "golden cross" chartist figure, however, should give some balm to the hearts of cryptosphere investors.