The Bitcoin balance on exchanges is a parameter that is closely monitored by the market participants. It can give a signal when a large amount of Bitcoin is moved in or out of exchanges causing the price to drop or rally. In the recent period it is also monitored as proof or reserves on exchanges. After the FTX collapse, exchanges started to be more opened and disclaimed their positions, with BTC in most cases being the number one.
As the latest development in the space, we now have the spot ETF approved from the US SEC, causing more BTC to be withdrawn from exchanges. Let’s take a look.
Here we will be looking at:
- Bitcoin balance on exchanges
- Historical share (%) of bitcoin balance on exchanges
- Bitcoin balance on exchanges VS supply
- Monthly Changes for BTC on exchanges
- BTC on Exchanges VS Price
- Top Exchanges holding BTC
The data is collected from sources like macromicro.me, cryptoquant.com and coinglass.com.
Bitcoin Balance on Exchanges
Here is the chart for the historical balance of bitcoin on exchanges.
This is a long term trend starting from 2012. As we can see prior to 2013 the amount of BTC on exchanges is almost nonexistent. After 2013 there is an increase in the amount of BTC on exchanges, reaching more than 600k at the end of 2014. In 2015 there is a small drop and after that almost a continuous growth up to March 2020, when an ATH for BTC balance on exchanges was reached with more than 3.2M.
Since 2020, the balance on bitcoin on exchanges is in constant decrease and it has dropped even more in the recent period. At the moment there is around 2M BTC on exchanges. Quite the drop since the ATH of 3.2M.
When we zoom in 2023-2024 we got this:
A continuous decline in the BTC balance on exchanges in the last year. At the beginning of 2023 there was around 2.3M, while the year ended at around 2M. A 0.3M reduction in 2023. If the trend continues at the end of 2024 there will be less than 2M BTC on exchanges.
Note there are some differences between different data providers on the amount of BTC on exchanges at them moment with the numbers in the range of 1.8M to 2M.
Bitcoin on Exchanges VS Supply
When we plot the balance on exchanges VS the overall supply, we get this:
We can notice the increase in the balance one exchanges up to 2020 here as well, and then a slow decrease. But still overall we can see how small this share is from the absolute supply when presented in the chart above.
Historical Share [%] of Bitcoin Balance on Exchanges
When we take a look at the Bitcoin balance in relative terms, as percent of the supply we get this:
This chart is similar to the absolute balance, but here we can see the share [%]. An all-time high of 18%, in 2020, and a drop since then to 11% where we are now.
When presented as a pie chart the chart looks like this:
CHART
A 11% of the Bitcoin supply is currently on exchanges. This is a low amount of the tokens on exchanges, especially having in mind that Bitcoin doesn’t have any type of staking rewards or similar incentives for users to withdraw their tokens of exchanges. The overall trend of self-custody has been growing.
Monthly Changes for BTC on exchanges
The change for the monthly balance on exchanges is as follows:
A positive bar is the inflow, negative outflow from exchanges.
We can see that last year September was the month with the most inflow on exchanges, and afterwards each month there was an outflow from exchanges. The maximum outflow happened in July. As mentioned, in 2023 around 300k BTC was removed from exchanges.
Bitcoin Balance on Exchanges VS Price
When we plot the BTC balance on exchanges vs the price we get this:
When we look at the long-term trend, we can notice that there has been a correlation back in 2017, when the price increased, that followed by a large amounts of BTC deposited on exchange, and this continued to grow even during the bear market of 2018 and 2019. In the last bull market of 2021, there hasn’t been any significant increase in BTC on exchanges. There was only a slight increase towards the end of 2021, but then the trend for removing BTC from exchanges continued, no matter the price.
Will this trend be over soon, or it will continue in the future remains to be seen.
In the last year these two have been moving in the opposite direction. The amount of BTC on exchanges down, and the price up.
Top Exchanges Holding BTC
Which exchange holds the most BTC. Here is the chart.
Binance is number one, with 550k BTC, followed by Coinbase with 406k, and then Bitfinex with 403k Bitcoins. These are the big three when it comes to Bitcoin holdings. The other exchanges are around or bellow 100k.
What’s interesting is that in the last months Coinbase has been the one exchange where the amount of BTC dropped, while on all other exchanges the BTC balance remained same (Binance), or increased slightly.
All the best
@dalz
