Bitcoin (BTC) reserves on exchanges continued to fall in recent weeks. According to data shared by CryptoQuant, the total number of BTC coins held by exchanges continues to fall and remains close to 5-year lows. This shows that there is a clear interest from users to hold their coins outside crypto trading platforms.
Bitcoin Reserves on Exchanges Continue to Fall
Investors and Bitcoin users worldwide continue to withdraw their BTC from exchanges. This trend has been accentuated in recent weeks as Binance and Coinbase deal with legal issues with the U.S. Securities and Exchange Commission (SEC). With fears that crypto exchanges could be affected by regulatory measures, users decided to move funds out of these platforms.
Cryptocurrency exchanges are the easiest way for users to get access to virtual currencies. It is an easy, fast and efficient way to get access to Bitcoin and other virtual currencies. For years, exchanges have helped the crypto market reach its current valuation.
However, people are also realizing the importance of self-custody. Self-custody is the practice of storing virtual currencies and their private keys without the help of a third party. While this is the best option for users that understand how Bitcoin and other cryptocurrencies work, it might not be the easiest option for crypto investors that use digital currency exchanges.
Volatility and uncertainty tend to be periods in which BTC reserves tend to fall from exchanges. With regulatory agencies in different jurisdictions taking different measures to control crypto exchanges, users prefer to withdraw their funds and store their BTC in cold storage or other wallets.
At the time of writing this post, Bitcoin has a price per coin of $31,000 and a market capitalization of over $600 billion.