Santiment, a blockchain analytics provider, reported that the current supply of Bitcoin on cryptocurrency exchanges stands at 6.4%, which is the lowest level since February 2018. The data reveals that crypto traders are continuing to withdraw their Bitcoin holdings from exchanges in favor of self-custody methods. This trend could be a result of the recent legal actions taken by the US Securities and Exchange Commission (SEC) against Binance and Coinbase.
SEC Legal Actions Against Binance and Coinbase
The SEC has filed lawsuits against Binance and Coinbase, accusing the companies of offering trading services with unregulated securities. These legal battles have resulted in trust issues for some users with the exchanges. The SEC accused Binance and Binance.US of offering unlicensed products, such as its native token BNB and the stablecoin BUSD, to customers. It also claimed that Coinbase operated as a broker, clearing agency, and national securities exchange without obtaining the necessary authorization.
Fewer Bitcoin Stored on Exchanges
Santiment’s data showed that only 6.4% of Bitcoin’s supply is currently held on cryptocurrency exchanges, compared to 16% at the beginning of 2020. The most extensive withdrawals of BTC from exchanges occurred after the FTX collapse at the end of last year. The trend of moving away from exchanges and towards self-custody methods is expected to continue. This is generally seen as a positive sign for Bitcoin, as the selling pressure is expected to decrease due to the lower Bitcoin supply on exchanges.
The recent legal actions by the SEC against Binance and Coinbase have resulted in a shift towards self-custody methods among Bitcoin traders. Santiment’s data reveals that the supply of Bitcoin on exchanges has hit its lowest point since February 2018, with only 6.4% of BTC’s supply currently held on cryptocurrency exchanges. This trend is expected to continue, which could be a positive sign for Bitcoin as the selling pressure is expected to decrease.