Arman Shirinyan

Traders and investors are turning to alternative options for fund accumulation

Contents

Series of currency outflowsInvestors lose confidence

A huge amount of Bitcoin is actively being removed from exchanges by traders and investors, according to the most recent glass node data. As the project suggests, March became the fourth straight month in which exchanges lost about 100,000 BTC.

Series of currency outflows

Beginning in late 2021, traders and investors were actively withdrawing funds from exchanges as confidence in centralized exchanges fell significantly and the market slowly entered the accumulation phase.

#Bitcoin the outflow volume of the exchange recently reached a rate of 96.2 k $BTC per month.

Aggregate outflows of currencies of this magnitude have only been observed on a handful of occasions in history, most of them after the March 2020 liquidity crisis.

Live Chart: https://t.co/k9wM940HCQ pic.twitter.com/836zjf39Nh

— glassnode (@glassnode) Apr 4, 2022

By early January, Bitcoin had already lost nearly 40% of its value since hitting its all-time high. At that time, Bitcoin whales reportedly started accumulating new coins in their wallets by purchasing new assets on centralized exchanges and moving them into their non-custodial wallets.

With an intensified accumulation and supply elimination from trading platforms, Bitcoin could fall victim to a supply shock in the future in the event of strong demand from private or institutional traders.

Investors lose confidence

Another cause fueling large outflows from exchanges is tied to the array of restrictions and account bans on major exchanges like Kraken or even Binance. The Kraken CEO urged users to withdraw their assets from exchange-controlled wallets to avoid trading or withdrawal restrictions, which the exchange management team cannot control due to the regulators of the countries in which they are based.

While large investors prefer wallets over trading platforms, smaller market participants move their funds to decentralized trading platforms that can avoid third-party sanctions or regulations.