Bitcoin hodlers are packing their bags: have exchanges obsolete?

The stock exchanges struggle with crumbling reserves, while investors indulge in the collector’s instinct. The market update.

The Bitcoin course (BTC) comes out of the weekend with a 24-hour plus 0.4 percent.

At the time of going to press, the key cryptocurrency is trading at $ 11,469, which is still around the key resistance at $ 11,500. On a weekly basis, the largest crypto currency posted an increase of 0.8 percent.

Bitcoin price in the weekly chart

Bitcoin stocks on exchanges are melting

BTC stocks on the exchanges have been dwindling since February of this year. With around 2.5 million Bitcoin, the reserves held by all exchanges are as shown in the graphic by Glassnode shows slipped to a two-year low.

Bitcoin exchange reserves

The market trend is counterbalanced by the simultaneous increase in the accumulation addresses. More and more investors are keeping their BTC and are pursuing long-term investment strategies. If the trend persists, this could create the breeding ground for a bull run. Larger breakout attempts of the Bitcoin course have thrown profit-taking in the recent past through the bill.

Bitcoin storage address

Because of the Hodl trend, the supply volume is ultimately not inflated by sales by investors, which should drive up the exchange rate if demand remains the same or increases. Glassnode defines accumulation addresses as those that have at least two incoming but no outgoing transactions.

The withdrawal of the stock exchange holdings could also be partly related to a loss of confidence in the exchanges. Finally, the crypto ecosystem has recently been overshadowed several times by irrelevance on some exchanges.

Bitcoin exchanges in disrepute

At the end of September, hackers managed to relieve hot wallets from users of the Bitcoin exchange KuCoin by an estimated 150 to 200 million US dollars. The stock exchange tried quickly to limit the damage and was able to quickly secure a large part of the hacker’s booty. A scar should still have remained.

Only a few days later it became known that the US Department of Justice and the Commodity Futures Trading Commission (CFTC) were investigating BitMEX . The exchange is said to have consistently disregarded compliance requirements such as anti-money laundering (AML) and know-your-customer guidelines (KYC). Charges have been brought against CEO Arthur Hayes, while CTO Samuel Reed has already been taken into custody . The receipt from the investors came promptly: Within one day around 44,000 Bitcoin were withdrawn from the exchange .

Last week OKEx also joined the group of problem exchanges. As the OKEx announced, no payouts are currently possible. For the official reasonit was said that a key holder was cooperating with police authorities and that no transactions could therefore be authorized at the moment. All other services are not affected. Investors still have to be patient, the payout function is still deactivated.