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Glassnode Glassnode @glassnode · 44.1K subscribers
Post #1058 20K
BTC balances on exchanges drop - does this mean we're in for a supply squeeze?

Not exactly. While exchange balances have fallen to 2.7M BTC (from 3.1M BTC in July 2024), most of this decline isn’t due to investor withdrawals but a shift in market structure.

📌 Key facts:

🔹The drop coincides with the launch of Bitcoin Spot ETFs.

🔹8 of 11 ETFs use Coinbase custody, meaning coins are moving from exchange wallets to institutional custodians.

🔹Glassnode classifies both under the ‘Coinbase entity’, impacting balance readings.

When adjusting for non-Coinbase ETFs (FBTC, HODL), the combined holdings of exchanges + ETF wallets remain around 3M BTC - the same level as January 2024.

Bottom line: The decline in exchange balances reflects a shift in asset custody rather than a net reduction in available supply.

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