Coinbase’s Bitcoin Holdings at Lowest: Whales Withdraw $1B

The recent decrease in Bitcoin holdings on Coinbase was caused by crypto whales, which moved huge amounts off the exchange. 

Because consumers have removed a significant portion of their Bitcoin holdings from the Coinbase cryptocurrency exchange, the amount of Bitcoin held on the exchange has dropped to its lowest level in nine years.

Throughout the weekend, whales moved 18,000 bitcoins worth approximately $1 billion off of Coinbase with transfer amounts ranging from $45 million to $171 million as stated in a study by CryptoQuant.

It is estimated that the public order book on Coinbase currently contains approximately 394,000 bitcoins, which is equivalent to $20.5 billion.

Whales move their Bitcoin holdings away from centralized exchanges, which is a bullish indicator because it indicates a decreasing supply of Bitcoin.

However, there is now a lack of consensus among users on social media regarding the nature of the relocation. Many believe that individuals are transferring this money to custodial wallets in anticipation of a price increase.

This is because the upcoming Bitcoin halving is only two months away resulting in a supply shock. Some believe that the shifted money could provide liquidity for over-the-counter (OTC) trades.

The majority of the items contained within these exchanges “doesn’t belong to them anyway, so this number should be a lot lower according to a few other individuals who explained that the cash might be transferred to a new custodian.

These withdrawals are not treated as individual withdrawals. Each halving cycle for Bitcoin cuts the new Bitcoin introduced into the market in half. This results in a supply bottleneck as demand continues to rise.

Bitcoin is set to undergo its next halving in April of this year and is expected to occur at a block height of 740,000. In the future, the block reward that miners receive for each block that they mine will decrease from 6.25 BTC to 3.125 BTC.

The most recent halving also occurs amid a significant demand from institutions as seen by the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January.

At the moment, approximately 900 bitcoins are mined every single day. However, the daily net intake of Bitcoin ETFs is approximately half a billion equivalent to approximately 9,650 bitcoins despite Grayscale recording a nearly $100 million daily outflow.

As a result of the halving that took place in April, the daily yield of bitcoin will be decreased to approximately 450 bitcoin, but the demand from institutions will continue to increase.

This enormous supply-demand imbalance has historically been bullish for the price of Bitcoin, as evidenced by the fact that Bitcoin has reached new all-time highs within a year following the halving of the Bitcoin supply.

The price of bitcoin is currently over $52,000, its highest level since December 2021. Also, it is only down 25% from its all-time high of over $69,000.