The amount of bitcoin held has changed substantially during the last three years. A staggering 804,000 bitcoins, worth $20.79 billion, have been removed from controlled exchanges since September 1, 2020. Notably, just 184,000 BTC, or $4.75 billion, of that total were withdrawn in the previous three months.

Billions in Bitcoin Withdrawn from Centralized Exchanges Amid Rising Self-Custody Trend

Significantly fewer bitcoins (BTC) are currently held by centralized exchanges than they were three years ago. According to data from Cryptoquant.com, trading platforms had a reserve of 2.828 million BTC on September 1, 2020. Three years later, that amount has decreased by 804,000 BTC, from 2.024 million to 2.024 million. Despite the fact that BTC holdings on exchanges have been steadily declining over the past few years, the FTX fiasco precipitated a significant drop.

Exchanges had 2.511 million BTC just before the company filed for bankruptcy in November 2022, indicating a withdrawal of 487,000 BTC since then. Since May 23, 2023, only three months have passed, and about 184,000 BTC have been taken out of centralized cryptocurrency exchanges. With a balance of 2,007,427 BTC as of August 28, the BTC holdings on various sites have almost fallen below the 2 million BTC threshold. The number of bitcoin holdings has increased somewhat during the last several days to 2.024 million.

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Data from September 2, 2023, shows that 892.09 BTC were withdrawn over a 30-day period starting on August 2 from Binance, the leading centralized trading platform for bitcoin holdings. According to measurements from coinglass.com, 5,718.86 BTC left Coinbase within the same time period. Bitfinex lost 429.02 bitcoins, whereas Okx withdrew 1,778.97 bitcoins. Gemini, one of the top five exchanges, saw a big withdrawal from their holdings of 22,313.24 BTC. Additionally, throughout the last month, Bybit saw a substantial outflow of 30,673.34 BTC.

The rise in self-custodial bitcoin (BTC) holdings highlights the trend of BTC withdrawals from centralized exchanges. By removing the risks connected to exchange weaknesses like hackers, future insolvencies, or regulatory crackdowns, such a strategy gives users complete control over their assets. The FTX failure provided a sobering reminder of these dangers, elevating the self-custodial philosophy even more. The benefits of self-custody are apparent, despite the fact that the precise causes of these large withdrawals are yet unknown.

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