Bitcoin has continued to fluctuate and fall recently. As of this writing, it is currently holding on to the $65,000 mark, down 4.7% in the past week. However, data shows that the Bitcoin balance on exchanges recently hit a three-year low, which may mean that investor sentiment has turned bullish (BTC will be transferred out to cold wallets for storage), and BTC selling pressure may be alleviated.
According to data from CryptoQuant as of June 19, Bitcoin’s exchange balance (the total amount of Bitcoin available on exchanges) has 2,825,703 Bitcoins remaining, which has dropped to a three-year low. During January this year, the balance of Bitcoin exchanges hovered around 3,039,000.
It can also be seen from the figure below that when the BTC balance of the exchange experienced a large decline, the price turned upward many times shortly afterwards. However, the biggest difference between the current situation and history is the launch of US spot ETFs, so the reference value may also change.
Bitcoin spot ETF drives BTC supply shock
According to the June 17 Coinshares weekly fund flow report , Bitcoin investment vehicles hold nearly $73 billion in Bitcoin globally. However, the same report also showed that weekly outflows from Bitcoin investment vehicles were $621 million in the week ending June 15, 2024, which was the largest outflow since the week ending March 22, 2024.
Coinshares analysis pointed out that the Federal Reserve's "more hawkish than expected" remarks imply that the Federal Reserve will maintain high interest rates for a longer period of time, leading to capital flight from fixed supply assets such as Bitcoin.
However, experts such as Franklin Templeton CEO Jenny Johnson believe that institutional adoption of Bitcoin has not yet fully launched. She said in an interview with CNBC: "This is really the first wave of early adopters, and I think the next wave is bigger. Entrance of institutions.”
If her prediction comes true, institutional capital will continue to flow into Bitcoin. In addition, the halving completed in April this year further limits the supply of Bitcoin, which may provide impetus to the rise of BTC.
