Bitcoin (BTC) investors began transferring their holdings to individual checking wallets called self-custody, after one of the world’s largest crypto exchanges, FTX, collapsed last week.
According to crypto analytics firm Glassnode, on-chain exchange flow data shows that withdrawals from exchanges are increasing, with assets transferred to individual control wallets.
Glassnode shared a post on Twitter on November 13, stating that Bitcoin exits from exchanges have reached an almost historic level. According to the data, this figure has reached 106 thousand BTC per month.
Glassnode stated that this situation has only occurred three times before, in April 2022, November 2020, and June-July 2022. The analysis company also noted that on November 9, the number of addresses withdrawing their assets from exchanges to their Bitcoin wallet accounts increased to 90,000.
This compares with only three other times:
– Apr 2020
– Nov 2020
– June-July 2022 pic.twitter.com/em7CsDBWUf
— glassnode (@glassnode) November 13, 2022
Seeing BTC outflows on exchanges usually indicates that the asset is held in the long run and the price will increase. The current scenario, however, seems to be the result of diminishing trust in centralized crypto exchanges.
Before stating that the outflows resulted in positive balance changes across all wallet groups, from small investors to whales, Glassnode used the following statements:
“The collapse of FTX has created a marked shift in the behavior of Bitcoin holders across all statistics.”
On November 6, when the FTX crisis began, balance changes across all BTC wallet sizes increased by 33,700 BTC, with small investors holding less than one token. Whale wallets holding more than 1,000 tokens saw an increase of 3,600 BTC.
With recent events causing heavy losses, industry leaders are now starting to defend individual control wallets.
Ethereum educator Anthony Sassano said on November 13 that crypto holders should hold their assets on centralized exchanges unless they are actively trading large volumes.
Michael Saylor of MicroStrategy said in an interview with Cointelegraph that individual control wallets prevent centralized third parties from abusing their power.
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On the other hand, Glassnode drew attention to the entry of stablecoins, which lost their stable values last week, to the exchanges.
November 10 saw nearly 1 million stablecoin inflows on centralized exchanges. Stablecoin reserves on all exchanges reached an all-time high of $41.2 billion.
“The repercussions of the FTX collapse will likely reshape the industry in many sectors and change the dominance and preference for centrally issued and unreliable assets,” Glassnode said.