Coinbase’s Bitcoin Holdings Hit 2015 Low as Whales Withdraw $1B BTC

The number of Bitcoin holdings on the Coinbase crypto exchange has reached its lowest point in nine years as users withdraw a significant portion of their holdings from the platform. A recent report from CryptoQuant reveals that whales moved 18,000 Bitcoin, valued at nearly $1 billion, off Coinbase over the weekend. The transfers ranged in value from $45 million to $171 million. Currently, Coinbase’s public order book holds approximately 394,000 BTC, which is estimated to be worth $20.5 billion. This movement of Bitcoin away from centralized exchanges is seen as a positive indicator, as it reduces the amount of Bitcoin available for sale.

The reasons behind these transfers have sparked a debate on social media. Some suggest that the funds are being moved to custodial wallets in anticipation of a price surge. With the Bitcoin halving just two months away, there is speculation of a supply shock, as the number of new BTC entering the market will be cut in half. Others believe that the moved funds may be used for over-the-counter (OTC) trades to provide liquidity. Another theory is that the funds could be going to a different custodian, and these transfers may not be individual withdrawals. Some argue that most of the Bitcoin on exchanges does not actually belong to the users themselves, so the number of withdrawals should be significantly lower.

During a Bitcoin halving cycle, the amount of new BTC introduced to the market is reduced by 50%, creating a shortage as demand continues to grow. The next halving is scheduled for April, at a block height of 740,000. Miners’ block rewards will be reduced from 6.25 BTC to 3.125 BTC with each mined block. This halving occurs at a time when there is a substantial institutional demand for Bitcoin, as evidenced by the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in the United States in January. Despite Grayscale experiencing daily outflows of around $100 million, Bitcoin ETFs have a daily net inflow of roughly half a billion dollars or 9,650 BTC. Currently, approximately 900 BTC is mined daily, and institutional demand is expected to rise even further.

Historically, the combination of decreased supply and increased demand resulting from a halving has led to a bullish trend in the Bitcoin price. New all-time highs have typically been achieved within a year of a halving event. Currently, Bitcoin is trading at around $52,000, its highest level since December 2021, although it is down 25% from its all-time high of approximately $69,000.