More and more BTC is being withdrawn from Exchanges. Is a bitcoin shortage now looming? A look at what’s left.

The ongoing Bitcoin boom ensures that the digital gold is becoming scarcer on the trading venues. Even the jump above the $30,000 mark did not result in a mass influx of BTC units into exchange accounts. HODLN, the unwavering holding of BTC, appears to be growing in popularity over short-term profit-taking. As data from blockchain analytics portal ViewBase suggests, Bitcoin Capital holdings at exchanges have steadily declined over the past year.

How much bitcoin do the exchanges still have?

At the time of writing, there are still 1,515,145 BTC stored in wallets tracked by ViewBase. The U.S. exchange Coinbase, in particular, has seen a significant bloodletting of its bitcoin reserve over the past 30 days. Of the approximately 91,907 BTC withdrawn from exchange wallets, around 83,700 BTC are attributable to withdrawals from Coinbase wallets. Only Bitfinex (+10,576 BTC), Bitstamp (+1,028 BTC), Poloniex (1,022 BTC) and the mining pool BTC.top (+124 BTC) recorded an inflow. Nevertheless, according to ViewBase data, Coinbase still has the most bulging bitcoin reserve.

  • Coinbase: 806,338 BTC
  • Huobi: 161,193 BTC
  • Binance: 104,061 BTC
  • Kraken: 100,203 BTC
  • OKEx: 92,689
  • Bitfinex: 88,660 BTC
  • Bitflyer: 55,213 BTC
  • Bittrex: 46,501
  • Coincheck: 33,129 BTC
  • Gate.io: 15,394 BTC
  • Bitstamp: 9,467 BTC
  • Poloniex: 2,161 BTC
  • BTC.top (Mining Pool) 137 BTC

As a result, crypto exchanges now hold only about 7.2 percent of the supply, which is limited to 21 million units. Data from blockchain analysts Glassnode also supports the impression of dwindling BTC reserves at the Exchanges. Only in the wake of the Corona crash of mid-March 2020 was there a significant influx in exchange wallets.

Bitcoin transactions to (green) or from (red) crypto exchanges.

Institutional Hodler

In recent months, it has become apparent where many of the Bitcoin units are flowing to: Into the wallets of institutional investors. According to data from Bitcointreasuries.org, for example, nearly 5.5 percent of all bitcoin is now in the custody of corporations. Among the largest corporate bitcoin holders are EOS group Block.One (140,000 BTC, or 0.667 percent of total supply) and U.S. data services provider Microstrategy (70,470 BTC, or 0.336 percent of total supply). However, the impressive numbers pale against the bitcoin assets that investment firm Grayscale has accumulated in its BTC investment fund. With 572,644 BTC, the fund now manages 2.73 percent of all Bitcoin that will ever exist.
Why there will never be 21 million BTC in circulation

Given these numbers, Bitcoin’s bullish price performance takes little wonder. Institutional hodlers are visibly depleting what is already a limited commodity, while at the same time increasing demand by cementing Bitcoin’s reputation as a safe haven asset, a safe haven for turbulent times. Above this, it is important to remember that the actual bitcoin in circulation will not be 21 million units even after the final halving (expected in 2140). This is because the cap cast in code does not take into account the number of BTC that are considered irretrievably lost.

Glassnode estimates the amount of bitcoin units lost or held ultra-long term at 7,219,749 BTC. This would mean that more than one in three of the circulating 18,590,543 BTC is either lost or in the hands of unbreakable hodlers.