A recent report from on-chain data analytics platform Santiment shows that the two most valuable cryptocurrencies by market cap, bitcoin (BTC) and ethereum (ETH), are actively being mined on cryptocurrency exchanges like Binance.
According HolyCryptocurrency holders are moving their assets from centralized custodial exchanges to cold storage wallets where they have control of the coins’ private keys.
Private keys are important seed phrases for signing transactions, sufficient proof that the sender owns coins.
On-chain data shows that the supply of these two major cryptocurrencies on major cryptocurrency trading platforms has been declining and shifting to self-custody.
Specifically, the amount of bitcoin on crypto exchanges sits at 5.84%, the lowest level since December 2017. Meanwhile, Ethereum on exchanges is at 10.1%, an 8-year low and a level last recorded during mining. from the Ethereum genesis block in July 2015.
In hard numbers, only 1.1 million of the 18.3 million BTC in circulation are held on exchanges. Similarly, only 12.1 million ETH sits on centralized cryptocurrency trading platforms.
Running on the exchanges can be a harbinger of the bull market
Santiment also noted that while the outflow of coins from centralized chutes is not a perfect indicator, it does point to potential bull runs.
Even so, the bulls should hold out until the two digital assets are depleted over time.
Furthermore, it may illustrate a growing need for investors to have full control over their cryptocurrency holdings and provide reassurance that they are secure, given the distrust in exchanges caused by the collapse from FTX last year.
In March, withdrawals from Binance, the world’s leading cryptocurrency exchange, spiked following a recent dispute between the cryptocurrency exchange and the United States Commodity Futures Trading Commission (CFTC).
Since September 2022, crypto investors have been moving coins en masse to self-custody addresses. The process accelerated in November 2022 following the disastrous collapse of FTX. The failure of the now-defunct exchange eroded user confidence in the centralized platforms.
Currently, some investors appear to be rushing to transfer their Binance holdings to cold wallets after the CFTC threatened to sue the exchange for allegedly violating local trading laws.
(embed)https://www.youtube.com/watch?v=LFUxIekGZco(/embed)
According to media reports, Binance clients withdrew $400 million within 24 hours of the CFTC’s declaration.
Parallel data further revealed that Binance users withdrew around $850 million from the platform in the 12 hours prior to the CFTC’s issuance.
Previously, Binance had to deal with significant withdrawal requests in Q4 2022. This is after federal prosecutors in the United States said they could bring money laundering charges against the ramp.
Despite the fears, the exchange did not default on its withdrawal obligations and completed all transactions without incident.
CEO Changpeng Zhao, better known as CZ, dismissed user fears that all the claims were a plot to create Fear, Uncertainty and Doubt (FUD) in the market.
