Bitcoin Exchange Inflows Hit Decade-Low, Signaling Investor Hesitancy
This news article discusses a drastic decrease in the regular inflows of Bitcoin exchange, which has not been seen in nearly a decade.
In April and May 2024, the daily Bitcoin exchange inflow accounts are seen at their lowest levels in the past decade. Even though Bitcoin cryptocurrency has reached an all-time high of US$73,800, the inflows to exchanges dropped.
This fall in Bitcoin inflow shows that few people are depositing their Bitcoin onto exchanges. Coming to the April 20 crypto market shows Bitcoin was trading at around US$63,009, and only 8,400 BTC flowed into exchanges.
These low levels of inflows were observed lastly when the Bitcoin exchange inflows were trading at less than US$1,000 per coin. This sentimental shift among Bitcoin holders has credit to a new era of Bitcoin investment.
Even after short-term price volatility, it was seen that institutional investors continued to show their interest in Bitcoin investment.
Furthermore, analysts caution against solely focusing on referring to large holders of Bitcoin.
“Whales in the range of 1k to 10k, which typically provide significant downward volatility to the market, have not been consistently participating in this current uptrend cycle,” CryptoQuant contributor Mignolet wrote in one of its Quicktake research updates this week.
While whales have not been consistently participating in the current uptrend cycle, resulting in downward volatility in the market, the cycle has not ended, as whales may not be willing to sell yet.
The decline in bitcoin exchange inflows may also be affected by the rolling of spot Bitcoin exchange-traded funds (ETFs).
These ETFs could captivate huge selling volumes outside of exchanges, especially in the over-the-counter (OTC) market, without the need for deposits into exchanges.
“There might be demand outside of exchanges, particularly in the OTC (over-the-counter) market, capable of absorbing large selling volumes even without deposits into exchanges post-ETF approval,” Mignolet wrote.
“Data around these entities is notoriously noisy, and I can almost guarantee that the big ‘whale’ wallets you’re watching are ETFs and exchanges,” he told followers in part of a post on X.
In summary, the dip in Bitcoin exchange inflows to 10 years is seen lowered after gaining all-time highs bouncing back a shift in sentiment among Bitcoin holders, with fewer coins being deposited onto exchanges among increasing institutional involvement and the introduction of spot Bitcoin ETFs.
