Although the bitcoin (BTC) price has remained stagnant in recent months, there is more happening behind the scenes than meets the eye. Miners are sending BTC to crypto exchanges, institutional investors are increasingly investing in the digital currency, and bitcoin whales appear to be awakening.
Exploring Bitcoin’s Current Landscape
In this article, we dive into the various developments surrounding Bitcoin, from the movement of miners to the behavior of institutional investors and the awakening of whale investors.
Heading 1: Bitcoin on Exchanges
A recent report from Bitfinex reveals a noteworthy trend: a decline in the number of BTC held on exchanges. This amount has reached historically low levels, last seen in February 2018. Currently, there are only 2.1 million bitcoins available on exchanges, which accounts for 11% of the total BTC supply. This is 31% lower compared to the peak of 3.1 million in March 2020 when 17% of all bitcoins were held on exchanges. While a lower number of BTC on exchanges may not necessarily be negative, it can have a positive impact on the BTC price as it reduces liquidity.
Bitfinex attributes this declining trend to several factors. First, the use of decentralized exchanges (DEX) is on the rise. Additionally, long-term investors seem to hold the upper hand, often opting for cold storage methods to safeguard their cryptocurrencies.
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Heading 2: SEC Lawsuits and the Declining Trend
The prolonged declining trend, ongoing since March 2020, can also be attributed to the crash of FTX and the lawsuits filed by the U.S. Securities and Exchanges Commission (SEC) against Coinbase and Binance. The SEC’s 13 charges against Binance revolve around unregistered token offerings and sales, as well as improper registration of the exchange. Similarly, the SEC claims that Coinbase operates as an unregistered exchange and facilitates unlicensed trading of securities. The lawsuit accuses Coinbase of violating securities laws, particularly in relation to their crypto staking service.