The
analytics
firm
Glassnode
has
revealed
that
exchanges
haven’t
been
bleeding
Bitcoin,
at
least
not
to
the
degree
many
previously
thought.
Bitcoin
Exchange
Reserve
Has
Only
Seen
A
Minimal
Decrease
In
Recent
Years
The
exchange
balance,
a
measure
of
the
total
amount
of
Bitcoin
sitting
in
the
wallets
of
centralized
exchanges,
has
often
been
a
hot
topic
in
the
on-chain
analysis
community.
Investors
use
these
platforms
for
selling-related
purposes,
so
many
look
at
the
exchange
balance
as
a
sort
of
reflection
of
the
“available”
trade
supply
of
the
cryptocurrency.
In
recent
years,
an
interesting
pattern
has
emerged
in
this
supply
sitting
on
the
exchanges,
with
its
value
observing
a
constant
decline.
This
suggested
that
investors
were
continuously
taking
coins
out,
thus
decreasing
the
asset’s
potential
sell
supply.
The
trend
made
some
community
members
think
Bitcoin
was
heading
towards
a
supply
shock.
There
was,
however,
also
opposition
to
the
idea,
with
questions
around
whether
the
outflows
were
simply
a
result
of
changing
dynamics
in
the
market
rather
than
an
apparent
shift
towards
widespread
HODLing.
Glassnode’s
modification
for
one
of
its
indicators
may
have
just
put
the
supply
shock
theory
to
bed.
As
the
analytics
firm
has
explained
in
its
changelog,
the
Coinbase
balance
has
been
updated
to
include
new
entities.
Previously,
these
labels
were
associated
with
Coinbase
Custody
in
our
database.
However,
we
have
decided
to
discontinue
this
distinction
as
differentiation
from
an
on-chain
perspective
is
not
always
clear-cut.
The
Coinbase
Custody
includes
coins
from
large
entities
such
as
spot
exchange-traded
funds
(ETFs).
Thus,
the
result
of
this
change
is
that
the
Coinbase
balance
has
now
seen
a
notable
increase.
The data for the Coinbase balance both before and after the modification | Source: Glassnode
As
is
visible
in
the
chart,
while
the
exchange
balance
appeared
to
be
shooting
down
earlier,
the
modification
has
meant
that
its
value
has
moved
more
or
less
sideways
over
the
last
few
years.
In
an
X
post,
on-chain
analyst
Checkmate
also
mentioned
the
topic.
“Exchange
balances
are
notoriously
hard
to
parse
and
monitor,”
says
the
analyst.
“They
are
an
advanced
metric
valuable,
only
if
you
know
what
you’re
doing.”
As
Checkmate
pointed
out,
the
wider
exchange
balance
chart
has
also
looked
flat
in
recent
years.
How the exchange balance has changed for BTC over its history | Source: @_Checkmatey_ on X
“Many
folks
who
have
been
talking
about
endless
outflows
did
not
appreciate
the
Bitcoin
balance
held
in
Coinbase
custody,”
notes
Checkmate.
In
March
2020,
the
total
exchange
balance
was
3.146
million
BTC;
today,
it’s
2.968
million.
There
have
still
been
net
outflows
since
then,
but
the
decrease
is
just
178,000
BTC,
which
isn’t
much
in
the
grand
scheme.
BTC
Price
At
the
time
of
writing,
Bitcoin
is
trading
at
around
$62,700,
up
more
than
2%
over
the
past
week.
Looks like the price of the coin has been going up over the last few days | Source: BTCUSD on TradingView
Featured
image
from
Dall-E,
Glassnode.com,
chart
from
TradingView.com
Go to Source
Author: Keshav Verma
