FameEX Hot Topics | Bitcoin Withdrawals Hit Record Levels with $2B Exiting Exchanges Daily

Bitcoin is witnessing an unprecedented exodus from exchanges, marking the most rapid withdrawal rate since mid-2021, signaling a potential for setting new records in terms of U.S. dollar value. The phenomenon underscores a significant shift in Bitcoin's market dynamics, with the cryptocurrency's price actions inching closer to surpassing all-time highs.

James Van Straten, a research and data analyst from the crypto insights firm CryptoSlate, highlighted this trend in a March 3 post on X, pointing out the massive scale of Bitcoin withdrawals amounting to billions of dollars. Despite a seeming hesitation among mainstream investors to fully dive back into cryptocurrency, the undercurrents reveal a significant drainage of Bitcoin reserves from exchanges.

Data shared by Van Straten, derived from on-chain analytics firm Glassnode, showed that on a single day, March 1, about $2 billion in Bitcoin was withdrawn from exchanges. Van Straten expressed his astonishment at the scale of these transactions, noting, "I don’t think I’ve quite seen anything like this before." He further observed that over $2.3 billion worth of Bitcoin was pulled from exchanges on that Friday, marking one of the largest withdrawal events in more than five years.

The data suggested daily Bitcoin outflows at levels comparable to the record withdrawals witnessed on June 28–29, 2021. Van Straten also touched upon the influence of U.S. spot Bitcoin exchange-traded funds (ETFs), which contributed to the significant outflows. As of March 2, Glassnode reported that the total Bitcoin assets available on major trading platforms it monitors dropped to 2,286,347 BTC ($142.5 billion), the lowest since March 2018 when the BTC/USD exchange rate hovered around $8,000. This depletion of exchange reserves reflects a tightening supply amid growing demand.

Furthermore, new market data reveals an influx of new participants into the Bitcoin ecosystem. Crypto Dan, contributing to the on-chain analytics platform CryptoQuant, noted changes in the ages of unspent transaction outputs (UTXOs), indicating that more recently acquired coins are becoming active while coins dormant for six months or longer are reentering circulation. He concluded, "New investors are flowing in, and in the near future, we can expect the influx of many new ‘individual’ investors," suggesting a broadening base of Bitcoin holders and a vibrant, expanding market.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.