Bitcoin Exchange Reserves Reach Lowest Level in Three Years

As of June 19, 2024, the Bitcoin exchange reserve has reached its lowest point in three years, indicating a decrease in the total amount of Bitcoin available on exchanges. This trend has been influenced by numerous factors, which we will address below. 

Impact of Low Bitcoin Exchange Reserves on Market Dynamics

According to CryptoQuant, the Bitcoin exchange reserve, or total amount of Bitcoin available on exchanges, has decreased to a three-year low of 2,825,703 on June 19, 2024. In January 2024, this was around 3,039,000 BTC. Low reserves point to possible supply shocks as well as reduced selling pressure.

This decline in exchange reserves follows the approval of Bitcoin ETFs in the U.S. in January 2024, which led to significant accumulation by asset managers like BlackRock, whose iShares Bitcoin Trust (IBIT) held 274,000 BTC as of June 6. BlackRock’s ETF is one of 11 currently trading in the U.S.

In addition, digital asset fund inflows, mostly into Bitcoin funds, hit $2 billion in May 2024. The Federal Reserve’s hawkish remarks on interest rates are probably the reason behind the $621 million in weekly withdrawals by June 15, 2024, the most since March 22, 2024, according to the Coinshares report published on June 17.

Industry experts like Jenny Johnson, CEO of Franklin Templeton, expressed that full institutional adoption still needs to be improved despite growing interest from institutions. Further pressure on the low exchange supply is expected if larger institutions invest. 

Additionally, the April 2024 halving reduced the block mining reward from 6.25 to 3.125 BTC, further constraining the supply.

FAQs

How much Bitcoin is left?

Bitcoin has a maximum quantity of 21m coins; as of March 2023, more than 19 million had been mined. Roughly 1.5 million bitcoins remain to be mined.

Who owns 90% of Bitcoin?

According to Bitinfocharts, the top 1% of Bitcoin addresses account for more than 90% of the entire Bitcoin supply as of March 2023.

Who owns the most Bitcoin?

Satoshi Nakamoto, the anonymous founder of Bitcoin, is believed to control most of the bitcoins, with estimates indicating that over 1 million BTC were mined during the network’s early days.

How much BTC is gone forever?

A 2020 analysis from Chainalysis estimated that approximately 3.7 million bitcoins had been lost.

Who created Bitcoin?

An anonymous person or group invented Bitcoin under the name Satoshi Nakamoto.

What gives Bitcoin its value?

What Drives the Price of Bitcoin? Bitcoin’s price is primarily driven by supply, demand, fear, and greed. 

Who controls Bitcoin?

Bitcoin isn’t controlled by a single entity. Instead, it is governed by a number of stakeholders, including developers, miners, and users. 

Takeaways

The significant drop in Bitcoin exchange reserves draws attention to possible supply limits and increased accumulation by institutional investors. This pattern highlights how the Bitcoin market’s dynamics are changing.