Bitcoin reserves on crypto exchanges have significantly decreased over the years, dropping below 3 million for the first time. This trend could impact the market and cryptocurrency prices.
Decrease in Bitcoin Exchange Volumes
According to CryptoQuant, the volume of Bitcoin on exchanges is just 2.46 million, down more than 171,000 BTC since Donald Trump's election victory. In January, there were around 3 million BTC available for trading, but the number has now plunged by half a million coins. Back in 2021, reserves stood at 3.2 million BTC, and a reduction in liquid supply often means upward pressure on the price, as there's less Bitcoin available for immediate purchase.
Trends Among Long-term Investors
While traders reduce their reserves on exchanges, long-term investors are holding onto their Bitcoin. Glassnode reports that 185,000 BTC moved into illiquid wallets last month, with approximately 14.8 million BTC, or 75% of the total supply, being held long-term.
Institutional Investment Influence
The Bitcoin market has seen a surge of large institutional investors. The Bitcoin ETF managed by BlackRock has recently crossed 500,000 BTC, while MicroStrategy has acquired an additional 15,400 BTC, raising its total to more than 400,000 BTC. These actions further decrease the volume of Bitcoin available for trading.
Despite the shrinking Bitcoin volumes on exchanges and recent price fluctuations, analysts forecast an optimistic scenario for the cryptocurrency in the long-term, especially with the expected increase in market demand.
