For the first time since 2018, Bitcoin’s balance sheet in the exchanges fell below 2.5 million

Bitcoin’s balance on three popular exchanges decreased by 390,000 BTC over the last 9 months.

On October 20, 2020, the amount of Bitcoin (BTC) held in the major exchanges fell below 2.5 million BTC for the first time in two years.

Market sentiment and BTC fundamentals still favor the rise in Bitcoin prices

Nexo co-founder Antoni Trenchev told Cointelegraph that this trend is driven by the world finally realizing that only Bitcoin offers a sound monetary policy:

„People] are slowly realizing what some of us have known for some time: BTC is the only sound monetary policy at this time and cannot afford to step away from the best performing asset of the decade.

He also noted that the community is turning more to self-custodial solutions, including platforms like Nexo, where they can „profitably borrow against their assets rather than sell them. Cointelegraph noted yesterday that the provision of Bitcoin is now more widespread than ever.

Major traders say Bitcoin’s logarithmic chart points to a bullish cycle similar to that of late 2017

Alex Mashinsky, co-founder of the crypto-lending platform, Celsius, told Cointelegraph that the exodus is likely to continue unless exchanges start offering better terms to their clients:

„As long as the exchanges refuse to give their customers more, they will leave them and return to Celsius. We just crossed the $2.7 billion in deposits since the launch two years ago. We wouldn’t be growing this fast unless we did more for our customers than the exchanges. „

In the graph above, we can see that this change has not affected all exchanges equally. Although the balances in BitMEX and Bitfinex were decimated, decreasing by more than half, Binance has continued to accumulate additional funds. Coinbase’s coffers have also remained virtually untouched.

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DeFi’s growth may also have contributed to this trend. The amount of Bitcoin blocked in Ethereum through wBTC and renBTC is currently over 130,000. Just a few months ago, these numbers were negligible. Another possible culprit is institutional adoption. In addition to the continued growth of Grayscale’s Bitcoin Trust, open-ended companies like MicroStrategy and Square began adding cryptoactives to their treasuries.

Why has this crypto trading software provider been so busy this 2020?

The biggest losers: the exchanges that led the trend.

There seems to be a general trend towards users withdrawing their Bitcoin from custody exchanges, or perhaps some important exchanges are simply losing the trust of their customers. The latter may be a reasonable conclusion, since only three platforms (BitMEX, Huobi and Bitfinex) were responsible for most of the trend: their balances decreased by 390,000 BTC, making them responsible for almost 80% of the total decrease.