• The BitMEX platform saw its reserves reduced by 49.55% in the penultimate quarter of the year.
  • Data suggests that the number of users preferring non-custodial storage increased.

Bitcoin reserves on exchanges such as Coinbase, OKEx, and BitMEX have dropped considerably in the penultimate quarter of the year. This is recorded by the BitUniverse platform, which calculates a decrease of more than 2 billion dollars in bitcoins for the last three months.

Users of the world’s leading cryptocurrency exchanges withdrew about 187,000 bitcoins since July, according to data from BitUnivers. In this way, reserves have fallen to minimum volumes that were not reported since May of last year, ecosystem sources emphasize.

One of the exchanges that has presented a greater number of withdrawals is BitMEX, which saw its reserves decrease by 49.55%. At the beginning of the month, the United States Commodity Futures Trading Commission (CFCT) accused the platform of operating illegally in the United States, a complaint that caused an untimely departure of more than 40,000 bitcoins in a matter of hours,  as was reported at the time.

The exchange owned some 224,000 bitcoins prior to the indictment, but only about 113,000 bitcoins are currently under its management. Numbers that demonstrate the impact that the company’s legal problems with the US government have had. However, this is not the only exchange that has seen bitcoins in its cold wallets dwindle.

The exchange held some 224,000 bitcoins in its accounts prior to the indictment, but only about 113,000 bitcoins are currently under its management. Numbers that demonstrate the impact that the company’s legal problems with the US government have had. However, this is not the only exchange that has seen the bitcoins in its cold wallets dwindle.

Bitcoin exchange reserves

Binance and Bitfinex are the only exchanges whose reserves have not been affected, unlike Coinbase, BitMEX and Huobi. Source: Bitcoin.com

Coinbase, one of the most prominent exchanges in the United States, has also seen a 9% decline in recent months. The platform had a million bitcoins at its disposal at the beginning of February, but users have withdrawn a total of 92,000 BTC, leaving some 908,560 bitcoins in their custody.

The second cryptocurrency exchange with the highest transaction volume, Huobi, has also processed the withdrawal of around 53,000 BTC from its wallets. While OKEx had about 240,000 bitcoins in its custody three months ago, now its reserves do not exceed 198,000 bitcoins.

Binance and Bitfinex are among the few large exchanges that have not had a large volume of bitcoin withdrawals. For example, Binance had about 269,000 bitcoins under its power at the beginning of the year and now it has about 266,000 bitcoins, a very slight decrease. Bitfinex, on the other hand, still keeps some 124,000 bitcoins in its cold wallets, a figure that has not changed much compared to what it registered in February 2020.

Exchanges own 12.85% of the total bitcoins to be issued

Graphs from the firm Glassnode indicate that at this moment about 2.7 million bitcoins are kept in exchange wallets. This market would have under its administration 14.59% of the total bitcoins circulating today, as well as 12.85% of the total supply of bitcoins that will be issued as scheduled on the network (21 million BTC).

In addition, 1.8 million of these bitcoins are in the wallets of the five most important exchange platforms in the ecosystem, such as Binance, Bitfinex, OKEx, Huobi and Coinbase. A record that confirms that the decrease in bitcoins in the reserves of these companies has a direct impact on the distribution of the cryptocurrency in the market and the pockets of its owners.

Bitcoin exchange wallets

Bitcoins deposited in exchange wallets amount to 2.7 million. Source: Glassnode.

The data could be indicating that more and more users are preferring to use non-custodial platforms to protect their bitcoins, instead of depositing them in third-party wallets. This hypothesis would explain how the demand in the Bitcoin market has rebounded, but the reserves of the exchanges are increasingly reduced.

Likewise, faced with platforms with increasingly limited reserves, cryptocurrency users should take into account that a decrease in liquidity in this market could occur in the coming months. A phenomenon that has the ability to affect the availability of money that users of centralized exchanges may have.