Bitcoin (BTC) withdrawals from exchanges continued in August with 65,000 BTC withdrawn, according to data released by Arcane Research. This is the third consecutive month in which there has been a negative result for exchanges. One of the reasons behind these withdrawals could be linked to the collapse of different crypto lenders.
According to a recently released report by Arcane Research, Bitcoin exchange net flows in August were – 65,000 BTC. This is the third consecutive month in which exchanges register a negative flow of BTC from their wallets. At the same time, August marked the seventh month this year with negative flows for exchanges.
The study shows that people are not only worried about lenders and possible systemic risks, but it could be a sign that investors are taking BTC investments seriously. The crypto community has been very clear about withdrawing funds from centralized exchanges and moving towards self-custody.
Let’s also not forget that centralized cryptocurrency exchanges are now even more regulated than in the past and they are being compliant with very strict KYC and AML rules imposed by governments all over the world. For example, Canada has been very strict with freezing BTC funds received by truckers earlier this year amid protests in the country.
Indeed, there might be other issues that have pushed users to withdraw funds from exchanges. These issues could be related to a lack of trust in exchanges and instability in the crypto market.
Arcane Research wrote on Twitter about the recent withdrawals from exchanges:
“Hodlers have been moving their precious #bitcoin out of exchanges like never before following this summer’s collapse of major crypto lenders. These events undoubtedly damaged the lenders’ trustworthiness, but are hodlers also losing trust in exchanges?”
Source: Arcane Research
It is worth pointing out that May was the only month with net positive flows to exchanges. At that time, 42,000 BTC were deposited on exchanges. Despite that, these 42k BTC were not enough to revert a trend that has only accentuated over the course of the last few months.
The results were -52k BTC in January, -20k BTC in February, -71k BTC in March, -9k BTC in April, 42k BTC in May, -119k BTC in June, -96k BTC in July and -65k BTC in August. It is worth pointing out that the final results for August are yet to come as it’s the current month.
As per Arcane Research, there is now 2.1 million Bitcoin deposited at exchanges all over the world. However, over 300k, BTC have been withdrawn just this year. The negative trend could continue in the future as well.
Some of the things that affected the entire crypto market included the collapse of the Terra (LUNA) ecosystem and the implosion of the cryptocurrency hedge fund Three Arrows Capital. Other lenders have also been affected.
At the time of writing this post, Bitcoin is being traded at around $21,450 and it has a market capitalization of $410 billion.