Bitcoin supply on exchanges hits 39-month low, long-term holders increase holdings

As the amount of Bitcoin (BTC) held by long-term investors soars, the token supply on cryptocurrency exchanges continues its downward trend, falling to its lowest level in 39 months.

According to data from on-chain metrics platform Santiment, as of March 17, the total supply of Bitcoin held on crypto exchanges accounted for only 10.25% of its total circulating supply, at 1,946,069.41 BTC, falling to its lowest level since December 2018.

The platform also noted that these exchange wallets hold 13.5% less Bitcoin than they did two months ago, accounting for 1.6% of the total supply. In comparison, as of January 18, these wallets held 11.85% of the total BTC supply.

Falling trading balances mean that there are fewer tokens available for liquidation on exchanges, meaning that sell-side liquidity is drying up, which could suggest that Bitcoin has room to rise sharply, especially when tokens withdrawn from exchanges are transferred to wallets with little activity.

In line with this trend, the amount of Bitcoin in long-term holders' crypto wallets has been increasing, hitting an all-time high on March 17. According to IntoTheBlock data, the total BTC balance of investors who have held for more than a year has exceeded 11.7 million.

The chart below shows that these holders’ positions have been trending upward since November 2021, after a one-month period of stabilization.

Additionally, data tracked by Glassnode showed that a total of 31,130 bitcoins left Coinbase last week, the highest single-week outflow since 2017.

Glassnode analysts believe: " Massive outflows like this are actually part of a continued trend in Coinbase balances, which have been gradually declining over the past two years. As the exchange with the largest BTC balance and the preferred venue for US institutions, this further supports the adoption of Bitcoin as a macro asset by large institutions."

Data from the Bitpush terminal showed that as of press time, Bitcoin was changing hands around $41,500, up 1.83% in 24 hours. The current market value of Bitcoin is $787.2 billion, up nearly 4% from a week ago.