Exchange News

Bitcoin Assets on Coinbase Hit Lowest Level Since 2015 as Whales Withdraw $1 Billion in Bitcoin

Bitcoin reserves on the Coinbase cryptocurrency exchange have hit their lowest point in nine years as users withdraw a significant portion of their assets from the exchange. According to a report by CryptoQuant, whales moved 18,000 bitcoins worth nearly $1 billion from Coinbase over the weekend, with transfer values ranging from $45 million to $171 million. Coinbase’s public order book now contains about 394,000 bitcoins, estimated to be worth $20.5 billion.

Whales distancing their Bitcoin assets from centralized exchanges are seen as a bullish sign because it means less Bitcoin is available for sale. However, users on social media dispute the nature of the transfers. Some believe the funds are being moved to custodial wallets in anticipation of a price increase ahead of Bitcoin’s halving, a supply shock event, while others think the moved funds could be for liquidity for over-the-counter (OTC) trades. Others suggested the funds might be transferred to another custodian and they are not individual withdrawals, as most of what’s in these exchanges doesn’t belong to them anyway, so this number should be much lower.

With each Bitcoin halving cycle, the amount of new Bitcoin entering the market halves, creating a supply squeeze as demand increases. The next Bitcoin halving will occur in April at block height 740,000, reducing the block reward for miners from 6.25 BTC to 3.125 BTC. This upcoming halving also occurs amidst massive institutional demand, with 11 Bitcoin exchange-traded funds (ETFs) approved in the United States in January. Currently, about 900 bitcoins are mined daily, while the net daily inflow of Bitcoin ETFs is about half a billion dollars or roughly 9,650 bitcoins, despite Grayscale recording close to $100 million in daily outflows.

After the April halving, the daily amount of produced Bitcoin will drop to about 450 bitcoins as institutional demand continues to rise. This significant supply-demand gap has historically proven to push Bitcoin’s price up, reaching new highs within a year after the halving. Bitcoin is currently trading at around $52,000, its highest level since December 2021, down 25% from its peak of about $69,000.

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