Bitcoin briefly touched $38,400 earlier today but retreated to levels of around $38,000 as of now. As the world’s largest crypto attempted to push higher, its supply on exchanges appears to be diminishing.
This reduction is attributed to significant regulatory setbacks faced by centralized crypto exchanges, which were once gatekeepers of the industry pivotal in providing liquidity and global accessibility to the industry.
Bitcoin’s Exchange Supply Declines
According to the latest analysis by Santiment, Bitcoin’s supply on exchanges is consistently shifting towards self-custody, coinciding with a decline in the reputation of cryptocurrency exchanges.
The overall supply of Bitcoin on exchanges is down to 5.38% – marking the lowest since December 2017. Such a trend can be viewed as bullish for Bitcoin as investors believe the asset is primed for more gains as the regulatory hurdles faced by the centralized crypto exchanges intensify.
💸 #Bitcoin‘s supply on exchanges has continued moving into self custody, as exchange reputation continues to diminish. Meanwhile, the 10 largest #Tether exchange wallets hold $15.23B, pushing exchange buying power to its highest level in 17 months. 💪 https://t.co/AtjD9ve3YO pic.twitter.com/XJ0uuTiAZx
— Santiment (@santimentfeed) November 29, 2023
The legal battle for Binance, for one, is far from over. The exchange recently paid $4.3 billion to settle charges with the US authorities without admitting guilt.
Its founder, who stepped down from the position of chief executive, Changpeng “CZ” Zhao, pleaded guilty to violating the Bank Secrecy Act, will be required to remain in the United States until the Seattle court decides whether he should stay until his sentencing hearing in February or if he can return to the United Arab Emirates, where he holds citizenship.
Coinbase, on the other hand, received a subpoena from the United States Commodity Futures Trading Commission (CFTC), which was speculated to have been related to Bybit.
Tether’s Top Exchange Address Soar
The crypto analytic firm also found that the 10 largest Tether exchange wallets collectively hold $15.23 billion, pushing exchange buying power to its highest level in 17 months.
An increase in the cryptocurrency’s supply on exchanges might indicate a rise in selling activity within the sector, potentially signaling a bearish trajectory for the asset’s price. However, the focus is on the metric for USDT, which is a widely used stablecoin and the largest one by market cap, that is known for consistently maintaining its value pegged to the US Dollar.
An investor might choose to retain their funds in a stablecoin such as USDT to shield them from the volatility commonly linked with other assets in the cryptocurrency realm. A significant number of stablecoin holders view these assets as a refuge, planning to re-enter the volatile market eventually. The act of purchasing assets like Bitcoin using Tether can naturally contribute to a bullish impact on market prices.