Bitcoin reserves on exchanges drop to 2018 levels despite price surge
Investors withdraw bitcoins from exchanges
Bitcoin reserves on cryptocurrency exchanges have reached their lowest levels since November 2018, despite the ongoing bullish market trend.
According to data from CryptoQuant, recent years have seen a growing trend of investors withdrawing their assets from exchanges to store them in hardware wallets for the long term.
This trend reduces the available supply on trading platforms, creating upward pressure on Bitcoin's price amid limited supply. If demand remains steady or increases, this could lead to further price growth.
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This scenario also reflects greater investor confidence in Bitcoin as a store of value, especially in a global economic context marked by uncertainty and high inflation.
Combined, these factors point to the likelihood of new price peaks in the near future.
Why investors prefer not to store bitcoins on exchanges
Bitcoin investors are increasingly opting to store their assets in hardware wallets rather than on exchanges. The primary reason for this choice is security. Hardware wallets offer offline storage for cryptocurrencies, making them virtually immune to cyberattacks.
Unlike exchanges, which can fall victim to hacks or internal misconduct, hardware wallets provide investors with full control over their private keys. This means only the owner has access to their funds, eliminating the risk of losing assets due to third-party actions.
Another key factor is independence from exchange policies. Storing funds on an exchange involves risks such as account freezes, asset lockups, or even total loss in the event of an exchange’s bankruptcy.
In contrast, hardware wallets ensure independence. Investors can securely hold their bitcoins without worrying about regulatory changes or the actions of an exchange.
Meanwhile, Bitcoin's price continues to climb. According to Ark Invest CEO Cathie Wood, Bitcoin has a strong chance of reaching $1.5 million by 2030.
