Bitcoin reserves on exchanges decreased to 2.7 million BTC due to the launch of ETFs

The number of Bitcoins on centralized trading platforms (CEX) fell from 3.1 million BTC in July 2024 to 2.7 million BTC in January 2025. Many perceive this as a sign of reduced liquidity in the market.However, experts believe that the decline did not occur due to mass withdrawals, but due to changes in the structure of asset storage. A significant portion of these coins has moved to custodial wallets.#ETF .

After the U.S. Securities and Exchange Commission (#SEC ) approved spot Bitcoin funds in January 2024, institutional investors began actively purchasing cryptocurrency. Out of 11 approved funds, 8 chose Coinbase as the custodian. This led to $BTC , previously stored on centralized exchanges, being moved to wallets owned by the company. This process is ongoing, which explains the decrease in exchange balances.

Experts believe: it is also worth considering that analytical platforms, such as Glassnode, combine exchange balances and custodial wallets #Coinbase . This can create a false impression of a mass withdrawal of Bitcoins from the market. In reality, they remain under the control of institutional investors. ETF wallets do not participate in traditional liquidity, but they do not mean a complete withdrawal of BTC from circulation.$TRB

If we exclude ETFs that do not use custodial services from Coinbase, such as #FBTC and #HODL , the total amount of Bitcoin on exchanges and in institutional wallets remains around 3 million BTC. This roughly corresponds to the level of January 2024. That is, despite the apparent reduction in balances, the total number of coins available on the market remains stable.$YFI

Changes in the structure of cryptocurrency ownership indicate a growing interest from large institutional investors. They prefer to store assets in custodial wallets rather than on exchanges. This reduces the likelihood of sharp sell-offs, but may also limit liquidity if demand for Bitcoin continues to rise.

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