Bitcoin Supply in Exchanges is Decreasing! What Does It Mean for BTC?

While the main source of the upward trend in Bitcoin is its limited supply, the fact that the demand for BTC continues to rise, combined with its limited supply, allows us to watch a constantly rising Bitcoin chart over the years.

Although Bitcoin fell to $ 15,000 after the bankruptcy of FTX in a difficult bear market, the demand for BTC continues to increase day by day.

We can understand that the demand has increased from the change in Bitcoin reserves in the exchanges.

Although Bitcoin is still about 50% away from its ATH of $69,000 in November 2021, investors who believe in the future of BTC continue to accumulate BTC regardless of what is happening.

According to CryptoQuant’s data, while Bitcoin foreign exchange reserves in exchanges increased steadily from 2013 to 2020, the approximately 10-year upward trend changed.

Accordingly, by 2020, investors and miners were depositing more BTC into exchanges to trade or sell.

However, since the end of 2020, this trend has changed, and the approximately 3 million BTC held on exchanges in 2020 has decreased by 32% in three years.

According to the data, there are currently approximately 2.04 million BTC in the exchange reserves.

While the decrease in Bitcoin reserves on exchanges indicates that investors withdraw their BTCs to a self-stored Bitcoin wallet instead of keeping them on exchanges and do not want to sell them in the short term, investors depositing their BTCs into an exchange usually indicates an intention to sell.

At this point, the decrease in BTC reserves in the exchanges is interpreted by experts as investors preferring to hold their BTCs to evaluate potential future increases rather than selling their assets in the short term.

Experts also state that the decrease in BTC reserves means that investors’ expectations for a rise in the BTC price have increased.

*This is not investment advice.