Despite the new ATHs the price of Bitcoin has benefited from, crypto exchanges currently hold the lowest amount of BTC ever.
Even if bull markets typically lead to an influx of funds, recent data show that cryptocurrency exchanges are experiencing a significant outflow of BTC simultaneously.
An eloquent example is crypto exchange Coinbase, which recently witnessed the removal of 14,608 BTC from the exchange, totaling $809 million. This massive outflow caused the amount of Bitcoin held on exchanges to drop to a new all-time low of almost 2.31 million BTC.
Bitcoin’s noteworthy price surge and its mass purchasing have led to an increase in its popularity across the globe. One of the reasons behind the decreasing BTC supply is the large investment made by major institutions and corporations, which purchased the cryptocurrency as a reserve asset.
MicroStrategy and Tesla are among the investors that made the headlines with the BTC amount they added to their reserve assets.
The cryptocurrency is thus becoming a store of value for major institutions and companies interested in diversifying their portfolios since it is considered as a hedge against the weakening US dollar and inflation.
Michael Saylor, the co-founder of MicroStrategy, stated earlier this month that the entire world was interested in a store of value that could replace gold, stocks, real estate, ETFs, bonds, and cash, and that “it is inevitable that more & more successful investors like Howard Marks are going to discover, research, & embrace Bitcoin.”
The low level of BTC held on crypto exchanges indicates that larger whales, retail investors, and corporates are buying up the cryptocurrency’s limited supply. If the BTC amount on exchanges continues to dry up, the crypto’s future price is likely to rise as scarcity sets in.