Key Points
- Approximately $10 billion in Bitcoin has been withdrawn from crypto exchanges since the US launched spot exchange-traded funds (ETFs).
- The trend of mass withdrawals from exchanges is expected to continue, indicating positive Bitcoin supply dynamics.
Since the initiation of spot exchange-traded funds (ETFs) in the United States, nearly $10 billion worth of Bitcoin (BTC) has been withdrawn from cryptocurrency exchanges. This information is based on data from Glassnode, a leading on-chain analytics firm, which shows a reduction of over 136,000 BTC on exchanges since January 11.
Mass Withdrawals Indicate Bullish Trend
The supply dynamics of Bitcoin continue to favor bullish trends as this quarter has seen significant withdrawals from exchanges. Despite the US spot Bitcoin ETFs trading for less than three months, around $9.5 billion worth of BTC has been withdrawn from major trading platforms.
As of March 28, the combined BTC balance held by Coinbase was 2,320,458 BTC, the lowest since April 2018. This trend of withdrawals is not slowing down. On March 27 alone, withdrawals amounted to more than 22,000 BTC, or $1.54 billion, marking the third-largest daily tally of 2024.
Stablecoin Transfer Indicates Potential Buying Pressure
In other market developments, J.A. Maartunn, a contributor to CryptoQuant, highlighted a significant transfer of stablecoin USD Coin (USDC) to Coinbase, the largest US crypto exchange. This is the largest inbound transfer of its kind in history, potentially indicating a strong buying pressure.
The long-term impact of ETFs on the available supply of BTC and its consequent effect on the price is a growing area of interest among market observers. Some predict a major supply squeeze, driven by demand surpassing the available BTC for sale, in the next six to twelve months.
The buying through ETFs already outpaces the new BTC released daily by miners. Following the upcoming block subsidy halving event in mid-April, this ratio is set to increase further. The BTC supply will then expand by just 3.125 BTC per newly-mined block.
Charles Edwards, founder of Capriole Investments, anticipates a significant halving event in Bitcoin's history. He suggests that for the first time, Bitcoin will become harder than gold, with half its supply growth rate. This, coupled with institutional demand via ETFs and a supply squeeze from the halving, positions Bitcoin as the world's hardest asset.
