While Bitcoin breaks new records every day, marking an ATH at $94,000, the liquid reserves on exchanges drop to the lowest levels of the last 6 years.
In the meantime, spot ETFs are grinding positive inflows and Nasdaq adds a new speculation tool on the currency through IBIT options.
Probably a new wave of optimism is on the way, but let’s see all the details together.
The Bitcoin held on exchanges drop drastically in 2024
The positive outlook for Bitcoin continues: as the crypto asset grows in market capitalization, its speculative presence on exchanges decreases.
All CEX hold a share of BTC in reserve as liquidity, which allows them to meet the trading and transfer requests of their users.
Usually, the more coins there are on these platforms, the greater the possibility that they can be sold on the market, weighing on their price.
On the contrary, a low presence on the exchanges is seen favorably for the price action, as it limits the potential selling pressure on the circulating supply.
At this moment the amount of Bitcoin held within the exchange has dropped to one of the lowest values in the last 6 years.
According to CryptoQuant data, in 2024 approximately 427,000 BTC were taken away from CEX, for a current value of 40 billion dollars.
It is now known that the large holders of Bitcoin use exchanges to sell their positions in Bitcoin. The same whale rarely hold large capitals within these platforms, preferring personal custody on private wallets.
The fact that many Bitcoin are leaving the exchange is therefore bull, as it highlights the users’ tendency to accumulate more and more coins.
Not by chance, from February 2024 onwards, the price of the orange cryptocurrency exploded in conjunction with the drop in the metric of reserves on exchanges.
It should also be emphasized how a low liquid availability on crypto exchanges could fuel a price supply shock dynamic.
If a strong wave of demand were to arrive, the supply might not be enough to meet all the requests, triggering the to the moon.
FYI : #Bitcoin ( $btc ) Holdings on Exchanges are close to an All-Time Low, only 2.33M #BTC left on Exchanges, Indicates Increased demand for Self-Custody, Potentially Reducing the Supply and Increases Buying Pressure pic.twitter.com/cyQiL7HdeP
— Baba Yaga
(@JPEG_Tycoon) November 18, 2024
(@JPEG_Tycoon) Exchange, companies, and governments with more Bitcoin
Despite the reserves of Bitcoin on exchanges drastically decreasing, the value of these coins continues to increase over time.
Due to a recent explosive price action, the CEX currently boast custody of over 225 billion dollars.
Undoubtedly the most “rich” of all is Coinbase, with a balance of 806,660 BTC equal to 75 billion dollars.
In second place is Binance, king of spot and derivatives trading volumes, with a share of 595,956 BTC equal to 56 billion dollars.
Closing the podium is the historic exchange Bitfinex with 379,664 BTC valued at 35 billion dollars.
Honorable mentions also for OKX, Gemini, Kraken, BitFlyer, Bitmex, Bithum, Bitstamp, and Bybit.
Almost everyone, except for Bitmex, records outflow of coins in the last 30 days.
Outside of the exchanges, there are also other entities that hold a significant amount of Bitcoin.
According to the data from BitcoinTreasuries, the largest holder (non-CEX) is BlackRock with its ETF Ishares Bitcoin Trust (IBIT).
The provider of exchange-traded funds has accumulated in less than 1 year the incredible amount of 449,965 BTC.
Another major hodler of the cryptocurrency is MicroStrategy, which with its company has acquired as many as 331,200 BTC from 2020 onwards.
Significant sums also in DeFi contracts, where WBTC (counterpart of BTC on the Ethereum blockchain) represents as many as 243,181 coins.
Among the private companies, we cannot fail to mention the US company Block.one, which has a reserve of 164,000 BTC.
In the rankings of the top holders, we even find the governo USA, which boasts a stack of seized BTC amounting to 208,000 units.
Let’s keep this figure in mind because after Donald Trump’s success in the elections, it is possible that America will start increasing its reserves in Bitcoin.
Launch of options on the BTC ETF: bullish for the cryptocurrency!
While the data on Bitcoin outflows from exchanges fuel the positive spirit in the markets, there is another big news that must absolutely be reported.
Yesterday, for the first time in history, Bitcoin options were launched with spot underlying, with the Nasdaq introducing the instrument on the IBIT spot ETF.
This milestone represents a milestone for the entire sector as it opens the doors to a new era of professional and regulated trading.
Options are a fundamental part of traditional finance, allowing bets based on expiration dates and strike prices.
With their debut on Wall Street we expect a further tightening on the liquidity available to be dumped on the markets.
Just yesterday, as highlighted by Bloomberg’s ETF analyst Eric Balchunas, there were significant volumes with a predominance of calls over puts.
Translated, investors have stormed the new speculative instrument by betting more on the next bull of BTC rather than on the bear.
A few hundred million so far in options volume on $IBIT (a ton for Day One).. here’s a rank of the contracts by volume, it’s almost all calls. Seems very bullish, esp the Dec20th C100, which is basically betting price of btc will double in the next month. pic.twitter.com/R6HB7OMUla
— Eric Balchunas (@EricBalchunas) November 19, 2024
The asset managers will need to ensure they purchase a sufficient amount of Bitcoin to guarantee adequate sustainability of operations through options.
This means that from now on there will likely be new demand for Bitcoin, which will once again limit their presence on exchanges. All of this will inevitably contribute to the increase in the value of the cryptocurrency, with the target of $100,000 no longer seeming so far away.