Bitcoin exchange reserves reach their lowest level in three years

The Bitcoin exchange reserve, which refers to the total amount of Bitcoin available on exchanges, has reached its lowest point in three years, as indicated by data from June 19, 2024.
According to analytics provided by CryptoQuant, there are currently 2,825,703 Bitcoin (BTC) remaining on exchanges. In comparison, during January 2024, the Bitcoin exchange balance was around 3,039,000.
A decrease in exchange reserves, also known as exchange balance, signifies a decrease in selling pressure and a potential supply shock due to the limited availability of Bitcoin for purchase.


The graph above displays the Bitcoin exchange balance as of June 19, 2024. Source: CryptoQuant.
Bitcoin ETFs and their Impact
The approval of Bitcoin ETFs in the United States in January 2024 has resulted in increased accumulation from asset managers like BlackRock, putting additional strain on Bitcoin’s supply. As of June 6, BlackRock’s iShares Bitcoin Trust (IBIT) held approximately 274,000 Bitcoin. It is worth noting that BlackRock’s ETF is just one out of the 11 Bitcoin ETFs currently being traded in the United States.
In May 2024, monthly inflows into digital asset funds reached $2 billion, largely driven by investments into Bitcoin funds and products. According to the Coinshares Weekly Fund Flows report released on June 17, Bitcoin investment vehicles globally hold almost $73 billion worth of Bitcoin.
Related:
Bitcoin whales acquire $1.4B within 24 hours amidst market correction.
However, the same report also revealed that Bitcoin investment vehicles experienced weekly outflows of $621 million during the week of June 15, 2024. This marked the largest and most significant outflows since the week of March 22, 2024.
Coinshares speculated that the flight of capital from fixed-supply assets like Bitcoin was a result of “more hawkish-than-expected” comments from the Federal Reserve, suggesting that interest rates would remain high.
Despite the growing interest from institutional investors, industry experts, such as Franklin Templeton CEO Jenny Johnson, believe that institutional adoption of Bitcoin is still not widespread. During an interview with CNBC, Johnson stated, “This is really the first wave of the early adopters, and I think the next wave is the much bigger institutions.”
If Johnson’s prediction proves to be accurate, institutional capital will continue to flow into Bitcoin, further straining the already limited supply on exchanges in the upcoming months.
The April 2024 Halving Event
Furthermore, the supply of Bitcoin is being further restricted by the reduction in the block mining reward following the halving event that occurred in April 2024.
Prior to the recent halving, miners received 6.25 Bitcoin for successfully mining a block. However, after the halving, miners now only receive 3.125 Bitcoin for each block mined.
Magazine:
Should you consider introducing children to Bitcoin? The argument for Bitcoin-themed children’s books.