The BTC supply on Exchanges keeps going down down down, but at some point it will turn...
There are a bunch of reasons why the supply of bitcoin on exchanges continues to fall week after week.
The main reason likely has to do with the corporate adoption taking place.
More and more institutions are buying bitcoin and putting it on their balance sheet, with coinbase being the exchange of choice which is likely why coinbase is seeing the most dramatic drop in bitcoin reserves.
Other reasons likely have to do with miners not having to sell their coins immediately when mined due to a robust futures and options market that helps them lock in prices and allows them to hodl the underlying.
Also, defi is a big reason for the supply reduction as well as investors put their bitcoin to work in defi protocols.
And finally, there may be some moving their bitcoin off of exchanges out of fear of regulations coming down the pipeline.
Janet Yellen said they would have new crypto rules announced by mid year, which is somewhere from now through August.
The rules are likely related to transfers to self hosted wallets from exchanges and KYC.
The end result of all these things converging looks like this in chart form:
Almost a 30% drop in BTC sitting on Exchanges from the peak a year ago.
That may not sound that great but this is all happening while roughly 900 new bitcoin are created every single day.
That should really put the supply crunch into perspective.
Every day there are 900 more bitcoin yet every day the amount sitting on exchanges continues to drop.
That's some serious demand soaking up all the bitcoin!
The good news is that as long as that supply keeps falling, we are a long ways from the top of this bull market:
Watch the exchange balances to get an idea on when the bull market is coming to an end!