Cold feet are in charge as exchange users continue to move Bitcoin from exchanges to non-custodial wallets.
Bitcoin (BTC) has flooded out of exchanges in the past week as users become wary of security and regulatory scrutiny.
Data from on-chain monitoring resource Coinglass shows United States exchanges in particular seeing heavy BTC balance reductions.
U.S. exchanges lead BTC exodus
In the wake of the FTX scandal, efforts to draw attention to the risk involved in custodial BTC storage stepped up on social media.
Users appeared to heed the warning, withdrawing over $3 billion in cryptocurrency in the week immediately following the solvency debacle and ordering record numbers of hardware wallets.
The aftermath of FTX is only just beginning, meanwhile, and as regulators plan investigative action and more attention to crypto as a whole, investors’ angst continues to grow.
The data shows the trend is still in force when it comes to exchange withdrawals. In the past seven days, practically all major platforms have seen net withdrawals outpacing deposits.
The biggest weekly reduction comes from Gemini, down almost 30,000 BTC, closely followed by Kraken, Binance and Coinbase.
Unsurprisingly, United States exchanges have seen particularly heavy withdrawals; the jurisdiction due to play a key role in the FTX saga going forward.
This week, lawmakers announced a dedicated hearing into what happened at the exchange, with its ex-CEO, Sam Bankman-Fried, reportedly due to be extradited to the U.S. from the Bahamas.
“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds,” Maxine Waters, Chair of the U.S. House Financial Services Committee, which will host the hearing, said, quoted by mainstream media.
The Coinglass figures meanwhile show that even those exchanges with no exposure to FTX have failed to stem the exodus.
In total for the week, 134,000 BTC has left their books — the equivalent of around $2.2 billion at current prices, with around $1.5 billion coming from U.S. platforms.
“Acute financial distress”
As Cointelegraph reported, while exchange withdrawals have surged, the average BTC hodler remains significantly underwater — and thus less than inclined to sell.
Related: Bitcoin price dips to $16.4K over Genesis woes as execs defend GBTC
Data from the on-chain analytics firm Glassnode confirms this. The average long-term holder (LTH) — an entity holding coins for at least 155 days — is 33% in the red.
This is almost unprecedented and matched only by the pit of the 2018 bear market, when the average tally hit 36%.
Accompanying comments described LTHs as undergoing “acute financial distress.”
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