Bitcoin exodus: Exchange balances drop to lowest level since 2018

Bitcoin (BTC) continues to dominate the cryptocurrency market, as exchange balances have dropped to levels last seen in early 2018. This signals a growing trend of investors moving their bitcoin holdings to cold storage, which is believed to be more secure.

according to a recent news reports While some of this decline in exchange balances may be due to the use of decentralized exchanges and funds not included in the data by Bitfinex, the broader trend appears to be a broader movement of people getting their bitcoin off exchanges.

Bitcoin-backed funds lead crypto investment growth

This trend is also reflected in recent data from CoinShares, which shows that traditional fund investors are showing renewed interest in bitcoin.

Crypto-backed investment funds saw net inflows of $137 million last week, with 99 percent of that amount directed toward bitcoin-backed funds.

According to Bitfinex, this marked the fourth consecutive week of gross inflows into crypto funds, with a total of $742 million accumulated during the period, representing the largest inflows since the last quarter of 2021.

Despite the inherent volatility in the crypto market, continued inflows into bitcoin-backed funds indicate strong investor confidence in the asset. Additionally, withdrawals from short-Bitcoin funds reinforce bullish sentiment among investors for the BTC price, which has been in a narrow range for months now.

Thus this data can be used as a proxy for the institutional investor bias that the price will break above this range.

Meanwhile, Ethereum funds were the only other category to see outflows last week, losing $1.6 million on a net basis. Altcoin funds, on the other hand, saw modest inflows, with the largest investments going to multi-asset funds, followed by funds backed by Solana’s SOL token and Polygon’s MATIC.

Overall, this data paints a clear picture of the continued dominance of Bitcoin in the crypto market. While altcoins are making their presence felt, bitcoin remains the preferred asset for traditional fund investors.

The continued inflow into bitcoin-backed funds shows that despite short-term volatility in the crypto market, investors have faith in the long-term growth potential of the asset.

Increased activity by BTC whales signals bullish market sentiment

according to a reports Whales, or entities holding 1,000 or more BTC, are making significant moves in the cryptocurrency market, according to Glassnode, with whales flowing into exchanges historically large and accounting for 41% of the total.

The dominance of whale flow volume across exchanges is significant, with over 82% of whale flow destined for Binance, the largest exchange in the industry. This trend highlights the importance of the role whales play in the cryptocurrency market, as their activity can have a significant impact on the price and overall sentiment of bitcoin.

While the report notes that many of these active whale entities are classified as short-term holders, with notable activity around local market peaks and troughs, it also highlights the long-term behavior of whales.

Glassnode’s Trend Accumulation Score by Cohort shows that most small entities with less than 100 BTC have slowed their spending over the past month.

On the other hand, the subset of whales holding more than 1,000 BTC exhibited divergent behavior, with those holding more than 10,000 BTC distributing and those holding 1,000 to 10,000 BTC accumulating at a much higher rate.

This behavior suggests that whales are actively shuffling their holdings, moving funds internally between institutions. While this may have short-term effects on the market, it also highlights bitcoin’s long-term potential to remain a valuable asset for investors.

Featured Image from iStock, Chart from Tradingview.com