Bitcoin supply shock? Percentage of BTC on exchanges nears 2018 levels

Key takeaways:

• Bitcoin’s percent proviso connected exchanges has dropped beneath 11% for the archetypal clip since 2018.

• Institutional adoption is accelerating BTC withdrawals from nationalist exchanges.

• Trust successful centralized platforms is shaky post-FTX.

Bitcoin's (BTC) percent proviso connected exchanges has dropped to adjacent seven-year lows, falling beneath 11% for the archetypal clip since March 2018, according to Glassnode data.

The highest occurred astir March 2020, erstwhile implicit 17.2% of the BTC proviso was held connected exchanges. Since then, implicit 6% of the full supply, oregon astir 1.26 cardinal BTC, has been withdrawn from speech wallets.

BTC percent equilibrium connected exchanges. Source: Glassnode

Let’s analyse the cardinal reasons down Bitcoin’s increasing withdrawals from crypto exchanges.

Bitcoin’s HODLing rises to a two-year high

Bitcoin investors are holding onto their coins astatine the highest level successful implicit 2 years, according to the latest Exchange Flows to Network Activity Ratio illustration by CryptoQuant.

The ratio, measuring the measurement of BTC flowing to exchanges comparative to onchain web activity, has fallen to its lowest speechmaking since aboriginal 2023, signaling subdued speech deposits contempt rising prices.

Bitcoin speech flows to web enactment ratio 30-day moving average. Source: CryptoQuant

As of aboriginal June 2025, the 30-day moving mean of the ratio sits adjacent 1.2, good beneath its 365-day mean and approaching -1 modular deviation.

Historically, specified debased levels person marked periods of beardown condemnation among long-term Bitcoin holders, with investors preferring acold retention to trading.

Related: Bitcoin eyes $115K by July, but beardown US occupation information to endanger rally: Analysts

This reduces disposable supply, with less coins perchance up for merchantability adjacent arsenic Bitcoin nears all-time highs.

Institutional custodians replacing crypto exchanges

The rise of organization custody solutions is different large origin down Bitcoin’s decreasing proviso crossed exchanges.

Instead of nationalist exchanges, ample fiscal institutions similar BlackRock, Fidelity, and Franklin Templeton similar third-party custody platforms.

Coinbase Prime, for example, reported implicit $212 cardinal successful assets nether custody successful Q1 2025, driven by “inflows from ETF issuers, corporations, and precocious nett worthy individuals.”

The Coinbase crypto exchange, connected the different hand, witnessed implicit $500 cardinal worthy of BTC outflows successful the aforesaid quarter.

BTC equilibrium connected the Coinbase exchange. Source: Glassnode

The outflows person continued into the 2nd quarter, including 761 cardinal worthy of withdrawals witnessed connected June 5.

Source: André Dragosch

ETFs person attracted a ample information of these Bitcoin to their coffers.

The nett worthy of assets managed crossed spot Bitcoin ETFs was $44.54 cardinal arsenic of June 5, up from astir $1 cardinal astatine their motorboat successful January past year.

Spot Bitcoin ETF cumulative flows. Source: Farside Investors

Supporting this trend, a 2025 survey by Coinbase and EY-Parthenon recovered that 83% of organization investors program to summation their crypto exposure, with astir 60% allocating implicit 5% of their AUM to integer assets.

About 61 nationalist companies already control implicit 3% of the full Bitcoin proviso of 21 cardinal tokens, according to Standard Chartered.

Trust successful exchanges dwindles post-FTX collapse

Following the collapse of FTX successful precocious 2022, Bitcoin experienced a melodramatic displacement successful speech flows, arsenic seen successful the Glassnode chart.

BTC nett transportation measurement from/to exchanges. Source: Glassnode

The nett transportation measurement (red bars) shows sustained outflows done aboriginal to mid-2023, marking 1 of the biggest withdrawal periods successful Bitcoin’s history.

From November 2022 to May 2023, play outflows repeatedly exceeded 10,000 BTC, totaling good implicit 200,000 BTC withdrawn from centralized exchanges.

This suggests that spot successful crypto exchanges has declined since the FTX collapse, accelerating Bitcoin withdrawals to self-custody and alternate platforms for trading.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.