Cryptocurrency exchange Coinbase's reserves in Bitcoins have fallen to their lowest level since 2017. This is due to significant withdrawals of user funds from the exchange.
"More than 18,000 BTC have been withdrawn from the platform, equivalent to nearly $1 billion," CryptoQuant reported.
The large transactions caused a significant drop in Bitcoin reserves, which reached their lowest level since 2017.
Over the long weekend in the US, investors withdrew nearly $1 billion in assets from the Coinbase exchange. At the same time, the volume of transactions ranged from $45 million to $171 million.
According to Cointelegraph, in the list of public orders, Coinbase has at the moment registered about 394 thousand BTC tokens, and the market value of these assets is about 20.5 billion dollars.
Usually, the withdrawal of Bitcoin stocks from exchanges signals bullish market sentiment. The withdrawal of BTC by the whales leaves much less Bitcoin available for sale and demonstrates their desire to accumulate assets before their growth.
Some experts attribute this to optimistic predictions of Bitcoin's value before the halving. However, social media users are divided on the nature of the transfers. Funds may be transferred to custodial wallets in anticipation of rising prices during the halving, which is predicted to occur in two months.
Each Bitcoin halving cycle reduces the number of new BTCs on the market, creating a supply crisis amidst a significant increase in demand. BTC halving is scheduled to occur in April when the block size reaches 740,000. After that, miners will be paid 3.125 BTC for each block mined instead of 6.25 BTC.
Bitcoin is also seeing a wave of investor interest after the launch of 11 spot Bitcoin exchange-traded funds (ETFs) in the US, which have already attracted significant funds.
Meanwhile, other market analysts believe that the moved funds could be used to provide liquidity for over-the-counter (OTC) trading. Whales can simply move funds to OTC branches or to other custodians. Funds can be sent to another custodian, and it is not an individual withdrawal.
Currently, miners are mining about 900 BTC daily, and Bitcoin ETFs are showing inflows of at least $500 million daily, which is about 9,650 BTC. This confirms the increased demand with a lack of supply.
After the halving, around 450 BTC will be mined daily, with demand from institutional investors continuing to increase, leading to a huge gap between supply and demand.
Bitcoin is currently trading near the $51,980 level, holding high but still 25% below the all-time high of $69,000.
Read also: UK prepares to pass stablecoins legislation
