Currency flows hit historic highs as Bitcoin investors took over

by · November 13, 2022

Bitcoin (BTC) investors have increasingly moved their holdings to self-custody solutions following the collapse of the world’s second-largest crypto exchange last week.

On-chain exchange flow data is shows an increase in withdrawals to self-storage wallets, according to analysis provider Glassnode.

In a November 13 post on Twitter, Glassnode reported that the Bitcoin exchange had reached near historic levels of 106,000 BTC per month.

It added that this has only happened three other times – in April 2022 and November 2020, as well as in June/July 2022. It also reported that the number of Bitcoin wallets receiving the asset from exchange addresses increased to around 90,000 on November 9 .

Currency flows are usually a bullish sign that BTC is being held for the long term. However, in this scenario, it appears to be a result of weakened trust in centralized crypto exchanges.

Glassnode commented that outflows have resulted in “positive balance changes across all wallet cohorts, from shrimp to whales,” before adding:

“The failure of FTX has created a very clear change in #Bitcoin holder behavior across all cohorts.”

Since November 6th, when the FTX fiasco began, balance changes have increased across all BTC wallet sizes with “shrimps” holding less than one coin increasing by 33,700 BTC. Whale wallets with more than 1,000 coins have seen an increase of 3,600 BTC, indicating that self-custodian pushing is happening across the board.

Industry leaders are now starting to embrace self-storage solutions as the phrase “not your keys, not your coins” holds more weight than ever before.

November 13, Ethereum Educator Anthony Sassano so that crypto holders should not store their assets on centralized exchanges unless they actively trade large amounts.

MicroStrategy’s Michael Saylor told Cointelegraph in an interview that self-storage prevents centralized third parties from abusing their power.

Related: $740 million in Bitcoin exits exchanges, the largest outflow since June’s BTC price crash

Glassnode also reported that stablecoins, many of which destabilized last week, have flowed to exchanges with increased rates in the past week.

On November 10, more than $1 billion in stablecoins entered centralized exchanges. The total stablecoin reserve across all exchanges it tracks hit a new all-time high of $41.2 billion, it added.

“The echoes of the FTX collapse are likely to act to reshape the industry across many sectors, changing the dominance and preference for trustless versus centrally issued assets,” it concluded.