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Why Almost $10B So Far Has Left Crypto Exchanges’ BTC Wallets in 2024

by Edison Irabor

Almost $10 billion worth of bitcoin (BTC) so far have left crypto-exchange wallets in 2024. Why is so much BTC leaving crypto exchanges, and where are these BTCs headed? How does this impact your BTC holding?

According to data from Glassnode’s on-chain analytics, over 136,000 BTCs have left crypto exchanges since 11 January 2024. Does that date sound familiar? Of course, it does! That’s the day spot Bitcoin exchange-traded funds (Bitcoin ETFs) were approved by the United States Securities and Exchange Commission (U.S. SEC)

Since Bitcoin ETF trading kicked off in January 2024, $9.5 billion worth of BTC has moved from major crypto exchanges to what is generally seen as a fresh and promising crypto ETF market.

Related: Historic U.S SEC approval paves way for spot Bitcoin ETFs trading.

There may be more BTC outflows from crypto exchanges into ETFs.

As more investors reposition to get the best from Bitcoin ETFs, crypto exchanges will feel the brunt of the BTC outflows. (But maybe excluding Coinbase who is not doing badly at all in the Bitcoin ETF euphoria!)

Understandably, there had been worries—which have not completely gone away—about ETFs cannibalizing crypto exchange fees as a number of crypto exchange users would most withdraw their crypto assets to deposit them into low-cost ETFs rather than holding their crypto assets directly.

Read also: Institutional investors would likely inject up to $1 trillion into bitcoin—Bitwise chief investment officer, Matthew Hougan

In the just-ended first quarter of the year 2014, BTC withdrawals have been massive.

In fact, there may be more BTC outflows from crypto exchanges into ETFs. The London Stock Exchange has announced that it would open its windows BTC and Ether exchange-traded notes applications in the United Kingdom (UK). Similarly, the securities agency in Thailand has also signaled its readiness to  accept overseas crypto ETFs for retail buyers.

Perhaps, one win-win way of looking at this shift is that the outflows still represent injection of funds into the crypto market.

Read also: Spot Bitcoin ETFs and the Crypto Market: The Other Side of the Coin

As reported by Cointelegraph, “As of March 28, the exchange info tracked by Glassnode held a combined 2,320,458 BTC — the lowest balance since April 2018 …. The trend shows no sign of slowing. Glassnode shows that on March 27 alone, withdrawals totaled more than 22,000 BTC ($1.54 billion) — the third-largest daily tally of 2024.”

Bitcoin halving around the corner, loading fast …

While Bitcoin ETFs appear to already be halving the number of BTC available on crypto exchanges, the Bitcoin halving event is loading fast. Combined, these two events are expected to strongly impact on BTC supply. 

With such a BTC crunch, the logical result—all things equal—is that BTC price would be going out on a date somewhere not too far from the moon with BTC investors and holders. 

Related: What is a Cryptocurrency ETF?

Of course, the effect of such a BTC crunch is not expected to be necessarily immediate. But it is not also expected to be too far away. This is estimated to be within 2 quarters to 4 quarters from now. 

Chased after by institutional investors in the ETF market and still on a hot date with  Bitcoin Halving this April, BTC is certainly not fooling around in 2024.’

Read also: Is the next bitcoin halving in 2024 going to be the magic wand for a bullish run?