Not Your Keys: Monthly Bitcoin Exchange Outflows Reach New ATH

Data shows the monthly Bitcoin exchange outflows have reached a new all-time high as investors have been rushing to get their coins into personal wallets, the keys to which they own.

Safety In Self-Custody: Historical Amount Of Bitcoin Exits Exchanges

As per the latest weekly report from Glassnode, BTC is currently exiting exchanges at a rate of 172.7k BTC per month, the highest ever.

The relevant indicator here is the “exchange net position change,” which measures the net amount of Bitcoin going into or out of wallets of all centralized exchanges per month.

When the value of this metric is positive, it means investors have been depositing their coins into exchanges in the past month. Since investors may have been transferring to exchanges for selling purposes, this kind of trend can have bearish implications for the price.

On the other hand, negative values suggest holders have been withdrawing a net amount of BTC recently. Such a trend, when prolonged, could be bullish for the price of the crypto as it might be a sign of accumulation from investors.

Now, here is a chart that shows the trend in the Bitcoin exchange net position change over the history of the crypto:

Looks like the value of the metric has been highly negative in recent days | Source: Glassnode's The Week Onchain - Week 47, 2022

As you can see in the above graph, the Bitcoin exchange net position change has been deep red during the last couple of weeks.

Following the latest plunge, the indicator now has a negative value of 172.7k BTC per month, the highest decline that exchanges have seen in the entire history of BTC.

The main reason behind these record outflows can be traced back to the collapse of cryptocurrency exchange FTX.

FTX’s fall and the resulting contagion has once again renewed fear in investors around keeping their coins in the custody of exchanges, where they don’t own the keys to their wallets.

Due to this reignited need for self-custody, Bitcoin holders are now withdrawing their coins at unprecedented levels from all kinds of centralized platforms, so that they can keep them in their personal wallets.

BTC Price

At the time of writing, Bitcoin’s price floats around $15.7k, down 6% in the last week. Over the past month, the crypto has lost 18% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have plummeted during the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com