Data from the on-chain crypto information aggregator Glassnode shows that the number of Bitcoin held on central exchanges has fallen by around 20% in 12 months.
The data suggests that investors are accumulating BTC and withdrawing it from the exchanges to cold stores, creating a supply crisis.
#Bitcoin Balance on exchanges taking another dive pic.twitter.com/F20tohfXsu
– William Clemente III (@WClementeIII) March 7, 2021
On March 6, Glassnode also released data showing that coins purchased in 2021 were not moved at a loss during the late February slump, according to on-chain analysis.
The company’s “Hodlwaves” metric, which measures the time since the coins were last transported in the chain, also indicates increasing accumulation activity. Hodlwaves data released on February 22nd showed that 57% of Bitcoin supply hadn’t switched in more than a year. However, more than a third of the BTC has not moved in more than five years, suggesting that a significant portion of the coins may have been lost.
The increasing popularity of decentralized exchanges and DeFi income logs can also cause the supply of BTC to decline on centralized exchanges.
According to DeFi Llama, the strong demand for bitcoin in the DeFi ecosystem, the total value of the BTC tokenization protocol Wrapped Bitcoin (TVL), has increased more than $ 1 billion since early March.
Wrapped Bitcoin TVL: DeFi Llama
