The blockchain analytics provider – Santiment – revealed that bitcoin’s supply on cryptocurrency exchanges currently stands at 6.4%, which is the lowest level since February 2018.
The rapid shift toward self-custody methods could be a result of the SEC’s legal actions against two of the leading crypto platforms – Binance and Coinbase. The Commission recently filed lawsuits, accusing the companies of offering trading services with unregulated securities.
- Santiment’s data displayed that crypto traders continue to move off their bitcoin holdings from exchanges. Currently, only 6.4% of BTC’s supply is held on such platforms, whereas the figure was 16% at the beginning of 2020.
- The last time the percentage was that low was in February 2018, amid a market correction that lasted several months.
📉 #Bitcoin‘s exchange supply has now fallen to its lowest level since February, 2018. Traders continue moving $BTC to self custody during the uncertainty surrounding #Binance & #Coinbase. As long as these #SEC lawsuits loom, this trend should continue. pic.twitter.com/c7MQyMswgp
— Santiment (@santimentfeed) June 14, 2023
- A main factor for the continuing trend could be the recent legal battles that the US SEC launched against the two crypto behemoths – Binance and Coinbase – and the subsequent trust issues that some might have with the exchanges.
- The watchdog’s harsh actions started on June 5 when it accused Binance, CEO Changpeng Zhao, and Binance.US of offering unlicensed products to customers, such as its native token BNB and the stablecoin BUSD, and filed a lawsuit against them.
- It targeted Coinbase a day later, claiming the latter operated as a broker, clearing agency, and national securities exchange, without previously obtaining the necessary authorization. The agency also claimed that the platform enabled trading services with unregistered securities, including SOL, MATIC, ADA, and others.
- Santiment’s graph also showed that the most extensive withdrawals of BTC from exchanges came after the FTX collapse at the end of last year. As such, it’s safe to assume that the percentage of bitcoin stored on exchanges will continue to be on the lower end as there’s a lot of uncertainty around trading platforms.
- However, that’s generally a positive sign for the asset, as the selling pressure should be a lot less given the fewer BTC stored on exchanges.