Only the most ardent Bitcoin holders are still holding onto their tokens as the crypto winter deepens, but not on exchanges. According to a Glassnode report, investors in the largest cryptocurrency in the world are entering a state of hibernation as on-chain activity fell by 13% in early July from its peak in November to levels last seen in the bear markets of 2018 and 2019, when Bitcoin was worth less than $10,000.
Investors are withdrawing their funds and storing them offline in cryptocurrency wallets as the risk-off market sentiment spreads to the markets for cryptocurrencies. According to Glassnode, the exchanges’ balances have decreased by more than 20% from their Jan. 20 high.
According to a Glassnode email dated July 4, “Bitcoin has seen a near-complete expulsion of market tourists, leaving the resolve of HODLers as the last line standing,” Last month saw Bitcoin’s first decline below $20,000 since 2020.
Bitcoin prices are hovering around $20,000 despite many activity levels, a demand indicator, trending downward in recent weeks. This suggests that there is still a steady holder base. HODLers, or persistent investors who refuse to sell, remain obvious, according to Glassnode, which claims that the cryptocurrency is still consolidating despite relatively flat transaction volume.
Coinbase Global Inc. has been the most severely impacted by the Bitcoin crash, losing 450,000 bitcoin in the past two years. According to Glassnode and TXMC, Binance, which recently teamed up with TikTok creator Khaby Lame and soccer player Cristiano Ronaldo, has experienced a rise of 300,000 Bitcoin over the same period, making it the most popular Bitcoin exchange.
Investor confidence in exchanges has declined recently as a result of operational issues like Coinflex’s, Vauld’s, and CoinLoan’s suspension of withdrawals and lowering of withdrawal amounts. According to Glassnode data, the illiquid supply of Bitcoin grew by 223,000 in June as investors moved money from exchanges to wallets. The majority of the 223,000, or over 140,000 tokens, were removed from the exchanges in June by large-scale cryptocurrency holders. Nearly 8.7 million Bitcoins, or more than 40% of the total supply, have been exchanged by these whales.
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