Since the launch of spot exchange-traded funds (ETFs) in the United States, nearly $10 billion worth of Bitcoin (BTC) has been withdrawn from crypto exchanges. According to data from on-chain analytics firm Glassnode, exchanges have seen a decrease of over 136,000 BTC since January 11. Despite this trend, there are no signs of profit-taking in BTC exchange trends.
Bitcoin supply dynamics continue to favor bulls as exchanges witness significant withdrawals this quarter. In the short span of less than three months since the introduction of U.S. spot Bitcoin ETFs, around $9.5 billion worth of BTC has been withdrawn from major trading platforms. As of March 28, the combined BTC balance on Coinbase, one of the tracked exchanges, reached its lowest level since April 2018, standing at 2,320,458 BTC.
This trend of mass withdrawals shows no signs of slowing down. On March 27 alone, more than 22,000 BTC ($1.54 billion) were withdrawn, marking the third-largest daily tally of 2024, according to Glassnode.
On the other hand, analyzing market flows, J.A. Maartunn, a contributor to on-chain analytics platform CryptoQuant, highlighted a significant transfer of stablecoin USD Coin (USDC) to Coinbase, the largest U.S. crypto exchange. This transfer was the largest inbound transfer of USDC in history. Maartunn questioned if this influx of USDC indicates strong buying pressure in a post on X (formerly Twitter).
The impact of ETFs on the available BTC supply and its subsequent effect on price is becoming a hot topic among market observers. Several sources now predict a major supply squeeze, where demand exceeds the available BTC for sale, within the next six to twelve months. The buying force from ETFs alone already exceeds the daily supply of “new” BTC unlocked by miners.
After the upcoming block subsidy halving event in mid-April, this ratio will increase even further. Following the halving, the BTC supply will expand by just 3.125 BTC per newly-mined block.
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, emphasized the significance of the upcoming halving event, stating that it will be the biggest in Bitcoin’s history.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions.