The exchange supply of Bitcoin (BTC) has reached its lowest point since February 2018, as traders opt to move their BTC holdings to self-custody wallets.
This trend has emerged amidst the ongoing uncertainty surrounding major cryptocurrency exchanges Binance and Coinbase, both of which are facing regulatory challenges from the Securities and Exchange Commission (SEC).
As long as these SEC lawsuits remain unresolved, it is expected that the trend of BTC moving to self-custody will continue.
Bitcoin Exchange Supply Reaches Historic Low
In a significant development, the exchange supply of Bitcoin has plummeted to levels not seen since February 2018.
This decline indicates a growing preference among traders to withdraw their BTC holdings from exchanges and secure them in self-custody wallets.
By moving their BTC off exchanges, traders are taking control of their own assets and mitigating potential risks associated with regulatory uncertainties.
Uncertainty Surrounding Binance and Coinbase
The ongoing regulatory scrutiny faced by Binance and Coinbase has contributed to the growing trend of self-custody for Bitcoin. Both exchanges are currently dealing with legal actions initiated by the SEC.
Traders, concerned about the potential impact of these lawsuits on the operations and assets held on these platforms, are opting for the increased security and control offered by self-custody solutions.
SEC Lawsuits and Their Effect on Bitcoin
The looming SEC lawsuits against Binance and Coinbase have created an environment of uncertainty within the cryptocurrency industry.
As long as these legal actions remain unresolved, traders are likely to continue moving their BTC holdings to self-custody wallets.
This cautious approach helps safeguard their assets and ensures that they maintain control over their Bitcoin holdings during these uncertain times.
The Importance of Self-Custody
Self-custody, also known as self-storage or self-sovereignty, empowers individuals to directly manage and secure their digital assets, such as Bitcoin.
By holding their BTC in self-custody wallets, traders eliminate the need to rely on centralized exchanges for asset storage. This approach grants them full control over their funds and reduces the risk of potential loss or freezing of assets due to regulatory actions or hacking incidents.
