Bitcoin (BTC) Reserves Steadily Drops in Exchanges

Bitcoin (BTC) reserves in exchanges have begun to decline since 2020.
The reserves have only been on the rise since 2013.
It looks like crypto winter urged the masses to hold their assets instead of trade.

The Bitcoin (BTC) exchange balance has been steadily declining since 2020. It seems the exchange balance chart for all exchanges shows a steady decline in Bitcoin (BTC) reserves. This decline has only begun after 2020.

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As we can see from this chart shared on the Reddit CryptoCurrency thread, the Bitcoin (BTC) reserves for all exchanges is in decline. Since 2013, the Bitcoin (BTC) reserve has increased tremendously up until 2020. Presently, it seems Bitcoin (BTC) is slowly being removed from exchanges.

This comes as no surprise since most cryptocurrency exchanges take partial ownership of digital assets on their platform. After all, they can at any moment freeze these assets and take control and ownership aways from crypto holders.

So far, quite a few exchanges have done so. They froze assets due to volatility to stay afloat. Eventually, every such move led to the fall of their platform, angry users, and loss of customers and investors. One such victim was Celsius, who recently filed for bankruptcy.

Coming back to the Reddit conversation, the user who shared the chart encourages the community to indulge in a thought experiment. They first remind the readers that Bitcoin (BTC) came to be when no exchanges existed.

Back then all BTC was held in self-custody. Once exchanges came to be, BTC flooded into them simply so the greater crowd could trade with this new shiny asset. Overall, exchanges allowed for traders to trade in billions of dollars worth of trading volume, every day.

But now, it seems the brutal crypto winter has many considering holding their assets instead of trading with them. The Redditor considers what it would be like if every user on the CryptoCurrency thread were to withdraw 0.43 BTC from an exchange. They hypothesize that this would lead to exchanges being completely out of BTC reserves.

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Lauren Cole

A focused and vigilant storyteller for all things blockchain and cryptocurrency. Besides consuming every piece of literature about the metaverse, she can often be found at industry convections looking for the latest scoop.