Following the failure of the second-largest cryptocurrency exchange in the world last week, investors in bitcoin (BTC) are rapidly transferring their holdings to self-custody options.
According to analytics company Glassnode, on-chain exchange flow data shows a spike in withdrawals to self-custody wallets. Glassnode said that Bitcoin exchange outflows have reached close to historic levels of 106,000 BTC per month in a post on Twitter on November 13.
It was also mentioned that this had only occurred three other times, in April 2022, November 2020, and June/July 2022. It further stated that on November 9, there were roughly 90,000 Bitcoin wallets receiving the asset from exchange addresses.
Balance changes have surged across all BTC wallet sizes since the FTX debacle started on November 6. The surge of 3,600 BTC in whale wallets with more than 1,000 coins shows that the self-custodian movement is spreading to all markets.
Exchange outflows typically indicate that BTC is being held for the long term, which is bullish. In this instance, though, it seems to be the outcome of waning trust in centralized crypto exchanges.
Glassnode also said that stablecoins, several of which destabilised last week, have been flooding exchanges at higher rates lately. On Nov. 10, stablecoins worth more than $1 billion arrived on centralised exchanges. It said that the total stablecoin reserve across all exchanges it monitors hit a fresh record high of $41.2 billion.