The ETH and BTC reserves on exchanges have dropped to their lowest levels since 2018. Users have withdrawn about 55,000 BTC and 583,000 ETH since early March.
The pioneering cryptocurrency has entered a new stage that proves the maturity its market participants have achieved. Investors increasingly seek self-custody solutions for their cryptocurrencies to have more control over their money. For that reason, Bitcoin (BTC) and Ether (ETH) inventories on exchanges reached minimum levels not seen since early 2018.
Data from Glassnode indicates that about 55,000 BTC and 583,000 ETH have left exchanges since early March.
BTC reserves on exchanges recently were 2,506,466, the same level that they recorded on November 5th, 2018. Last March 1st, there were 2,561,570 BTC on those platforms, representing a decrease of 2.15% in around three weeks.
Considering that the current price of BTC is close to USD 43,000, about 24,245 million worth of Bitcoin have left exchanges in March.
The all-time high of BTC inventories occurred on March 15th, 2020, following the market crash caused by the COVID-19 pandemic. Since that high was 3,138 million BTC, the reserves on exchanges have dropped by 20.14% in two years.
The ETH Reserves on Exchanges Decline alongside BTC
A recent low of 21.55 million ETH indicates that the reserves dropped to the levels of September 2018. Compared to early 2022, there is 2.6% less ETH on exchanges, while the decrease since the all-time high of June 2020 is 31.9%. At that time, ETH reserves reached 31.38 million, nearly 10 million above current inventories.
The outflow of BTC and ETH from exchanges has accelerated in the last few weeks, suggesting an accumulation strategy by investors. During accentuated selling periods, associated with a decrease in prices, the inflows of cryptocurrencies are higher.
The current scenery is quite the opposite since there is still outflow on exchanges while the consolidation of the BTC price is underway. It is beginning to fluctuate around USD 44,000, while ETH has exceeded USD 3,000.
Data from CoinGecko indicates that the market capitalization of cryptocurrencies has exceeded USD 2 trillion in the last few days. Meanwhile, CoinMarketCap assigns USD 1.991 trillion to the value of the market.
Investors Seek more Control over their Cryptocurrencies
The volume of transfers of the two leading cryptocurrencies from exchanges to wallets has increased significantly. That could mean that more investors are considering solutions to have greater control over their cryptocurrencies.
That would indicate a greater maturity of the market and a preference among investors to increase autonomy regarding their money. The risks of transferring custody, like fund freezing or transaction censorship, to centralized entities would also decrease.
Sharing private keys with centralized entities, like most exchanges, goes against money decentralization. The latter is the most novel feature of Bitcoin, and trusting third parties is against that advantage. As the traditional monetary system is increasingly centralized and sanctioning, users prefer to keep their cryptocurrency holdings in self-custody solutions.
By Alexander Salazar
