According to data from CryptoQuant, Bitcoin exchange reserves have plummeted to their lowest levels ever recorded, spanning back to early 2021. Over the past month alone, more than 90,700 bitcoins have been withdrawn from major cryptocurrency exchanges, reducing the liquid supply of bitcoin and indicating a trend of investors adopting long-term holding strategies.
The significant decrease in exchange reserves suggests that investors are increasingly opting to withdraw their bitcoins from exchanges and store them in cold storage for the long term. This trend has been ongoing for several years and may be attributed to various factors, including the rise in the digital asset’s price, the approval of spot bitcoin ETFs, and anticipation surrounding the bitcoin halving event.
Glassnode data further corroborates this trend, indicating a significant transfer of bitcoin from long-term holders to short-term holders. As prices rise and unrealized profits held by investors increase, long-term holders may be enticed to part with their holdings, contributing to the increasing supply held by short-term holders.
The report highlights that the short-term holder supply has increased by around 1.121 million bitcoins, effectively absorbing the distribution pressure from long-term holders. This shift in supply dynamics underscores the evolving nature of bitcoin ownership and investor behavior in response to market conditions.
In July 2021, bitcoin exchange reserves stood at around 2.8 million bitcoins, indicating a decrease of approximately 900,000 coins since CryptoQuant began recording this metric.