$2.7 billion worth of BTC moved out of cryptocurrency exchanges
Cryptocurrency exchanges – In line with the recent decline in Bitcoin price to a record 50% in May, the market has continued to experience and exhibit a downward trend.
Given this, there has been a corresponding outflow of the flagship cryptocurrency from the exchanges.
Ironically, it has been revealed that some traders are comfortable with the current price despite the prevailing downtrend of the BTC in the market, and are not ready to liquidate their bitcoin on the exchanges.
While waiting patiently for a price rebound, traders are moving their coins to wallets, custody, or cold storage relatively.
As of Monday this week, crypto exchanges recorded a net outflow of approximately 79.79k BTC, this represents a gain of 360% in the last 24 hours/and 187% in the last 30 days.
Petr Kozyakov, co-founder and CEO at the global payment network Mercuryo told coindesk, “The outflow can best be described as multifaceted, bordering on HODLing and the use of digital currency in decentralized finance.”
Interestingly, the number of BTC held in exchange wallets fell to a 3-week low of 2.54 million from 2.56 million as net exchange flows remain in the negative axis.
Given this, investors move coins from exchanges to wallets, cutting out liquid supply from the market when they need to buy and hold wait for price rallies.
Petr Kozyakov continued, “Investors appear to be storing their assets in hardware wallets with anticipation that the current drop in price will balance out for new price runs toward and above its previous all-time high.”
Several investors take direct custody of BTC and tokenize the coin on the Ethereum blockchain for extra yield.
For learning purposes, tokenization is the locking up of bitcoin on Ethereum and issuing an equivalent number of tokens tied to bitcoin’s price. Subsequently, the token is deposited in decentralized finance, lending, and borrowing protocols.
According to Petr Kozyakov, “With bitcoin in DeFi, investors get to maximize their earnings amidst dwindling prices, a better option for many who prefer to keep their assets idle.
Data from the website, DeFi Pulse, shows total Bitcoin locked in smart contracts has grown from 94,000 in April to about 174,000 now. Such tokenization of bitcoin on other networks is also a source for the reduction of supply in the market.