The interest of institutional players in Bitcoin has been surging exponentially. Based on the report, the major institutional firms, including Grayscale, Paypal, and Cash App, are buying more Bitcoin than is being mined.
Amid the rising institutional demand, the Bitcoin balance on all cryptocurrency exchanges has dropped to the lowest level noticed since 2018. According to Glassnode data, The total number of Bitcoin hit $2.3 million, years low.
The balance on all giant exchanges was steadily soaring up over the last decade. In January 2020, the total amount of Bitcoin moved to 350,000 BTC, worth almost 3 million dollars. After hitting the highest point, the Bitcoin balance on the exchanges slumped to $2.3 million, representing a decline of 23%. The downward trend has amplified in December as the total number of Bitcoin on exchanges has declined by 2.4%.
Bitcoin Outflow Symbolizes a Positive Future
Investors are withdrawing their Bitcoin from the crypto exchanges in concern of a hack. During the recent Bitcoin bull run, the giant exchange KuCoin underwent a significant hack. As a result, the exchange’s trading volume decreased by 21% compared to last year.
Bitcoin analyst at Quantum Economics Jason Deane said, “The obvious conclusion is that it is being moved to long term cold storage, but it could also be an indication of improved awareness of security from more sophisticated users wary of the ‘not your keys, not your crypto’ mantra.”
According to some crypto experts, this trend indicates that investors are holding the asset for the long term. CTO of Glassnode Rafael Schultze-Kraft said, “I think this is extremely bullish for the price of Bitcoin.” Meanwhile, analysts at JPMorgan Chase considered that the mainstream adoption of Bitcoin might hurt gold market share, which is extensively used as a reserve asset.