Bitcoin has been moving out of exchanges recently as users grow concerned about security and regulatory issues.
According to data from Coinglass, US exchanges have seen a significant decrease in their BTC balances.
US exchanges at the forefront of BTC exodus
After the FTX scandal, there has been a push to highlight the risks of custodial BTC storage on social media.
Following the incident, users reacted by withdrawing over $3 billion in cryptocurrency and purchasing record numbers of hardware wallets.
The aftermath of the FTX situation is just beginning, with regulators increasing scrutiny on the crypto industry, causing investors’ concerns to rise.
The data indicates that exchange withdrawals continue to be a trend. In the past week, almost all major platforms have experienced more withdrawals than deposits.
The largest decrease is seen on Gemini, with a reduction of nearly 30,000 BTC, followed closely by Kraken, Binance, and Coinbase.
Notably, US exchanges have seen substantial withdrawals, as the jurisdiction plays a crucial role in the ongoing FTX saga.
This week, lawmakers announced plans for a hearing to investigate the FTX incident, with former CEO Sam Bankman-Fried expected to be extradited to the US from the Bahamas.
Maxine Waters, Chair of the US House Financial Services Committee, expressed concerns about the impact of FTX’s downfall on over a million users who invested their savings in the exchange.
Even exchanges not involved with FTX have witnessed significant withdrawals, with a total of 134,000 BTC leaving their books in a week – equivalent to around $2.2 billion at current prices, with $1.5 billion originating from US platforms.
Financial stress for BTC holders
Despite the surge in exchange withdrawals, the average BTC holder is facing losses and is less likely to sell.
Data from on-chain analytics firm Glassnode reveals that the average long-term holder (LTH) – someone holding coins for at least 155 days – is currently facing a 33% loss.
This level of losses is comparable to the depths of the 2018 bear market, with LTHs experiencing a state of “acute financial distress.”
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