Bitcoin exchange outflows surge as ‘not your keys, not your crypto’ comes back into fashion


Bear markets in cryptocurrency are known to be painful, but the month of June was especially trying for crypto loyalists as a confluence of factors resulted in a 37.9% drop in the price of bitcoin (BTC), its highest since 2011. Worst monthly performance.

bitcoin monthly performance Source: Glassnode.

According to blockchain analytics firm Glassnode, as a result of continued widespread weakness, the majority of so-called bitcoin “tourists” have now run out of space, with only the most dedicated holders remaining.


Despite bitcoin’s ongoing struggles and the fact that crypto traders are currently experiencing the worst bear market in the region’s history, several metrics suggest that the outlook is not as dire as some are predicting and the crypto market The Hodler base remains strong.

Increase in the number of dedicated holders

According to Glassnode, major sell-off events as well as a significant purge of bitcoin wallets operating in early bear markets are a common occurrence. However, the severity of the exodus has been waning since the 2018 bear market, indicating that “the level of resolution among the average bitcoin participant is increasing,” said Glassnode.

During the most recent reduction in the number of addresses with non-zero balances, only 1% of bitcoin addresses completely purged their holdings, compared to 2.8% between April and May 2021, and 24% did so between January. Just did it. As of March of 2018.

Number of bitcoin addresses with non-zero balances. Source: Glassnode

While on-chain activity for bitcoin remains muted and solid in bear-market territory, the most dedicated bitcoin holders continue to hold the line, and will likely continue to do so until the market turmoil subsides. and a floor would not have been established in the BTC price.

return best bitcoin practices

The ethos of “not your key, not your crypto” is once again gaining traction in the crypto community as traders are withdrawing their tokens from exchanges at a frantic pace. The collapse of the Terra ecosystem, the potential bankruptcy of Celsius and the explosion of Three Arrows Capital have all served as a clear reminder that crypto is intended to be stored in cold storage.

Change in the net position of the bitcoin exchange. Source: Glassnode

Since March 2020, the number of bitcoins held on exchanges has decreased from 3.15 million to 2.4 million. This is a total outflow of 750,00 BTC, of ​​which 142,500 happened in the last three months.

As platforms such as Celsius have halted withdrawals and smaller exchanges begin to limit the amount users can withdraw, the desire to gain personal control over crypto assets has become a top concern for holders.

This can actually be seen as a positive for the price in the long term as tokens locked in cold storage and not readily available to sell on exchanges reduce the chances of further capitulation.

related: With bear market in full force, crypto derivatives maintain their popularity

Starts receiving retail interest

Another encouraging development amid the worst month in bitcoin’s history is the growing interest from wallets holding less than 1 BTC, which are more likely to represent the retail group of the crypto market.

According to Glassnode, these so-called “shrimp” wallets are eagerly pushing low-priced bitcoin to 60,460 BTC per month, “the most aggressive rate in history.”

Change in the net position of the Bitcoin Shrimp wallet. Source: Glassnode

Even with crypto in a bear market, a number of underlying metrics, including a dedicated group of crypto holders and increasing interest from smaller retail buyers. The suggestion is that the calls for the death of bitcoin are premature once again.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, so you should do your own research when making a decision.