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The amount of Bitcoin held by Coinbase in its public order book has plunged to a nine-year low of 394,000 BTC worth around $20.5 billion after massive withdrawals.
Whales withdrew over 18,000 BTC from the exchange, worth nearly $1 billion, last weekend, according to CryptoQuant, with amounts ranging between $45 million and $171 million.
🚨BREAKING: #Bitcoin Holdings On Coinbase Reach The Lowest Level Since 2015!
The exchange now has approximately… pic.twitter.com/gqKFcNO2gw
— Kyle Chassé (@kyle_chasse) February 19, 2024
The withdrawals have triggered mixed sentiments from crypto users on X. Some believe that the purpose of the transfers is to boost liquidity for OTC trades.
Possible Bitcoin Supply Crunch Looming
Others say that the withdrawals signal an upcoming Bitcoin rally driven by a supply crunch.
Institutional demand for Bitcoin is currently high following the approval of spot Bitcoin exchange-traded funds (ETFs) in the US. These funds have a daily net inflow of 9,650 BTC. Some crypto users on X believe the Coinbase transfers are a result of these institutions buying Bitcoin.
Largest hourly #Bitcoin outflow in 2024 from Coinbase today: 18,746 Bitcoin moved in two transactions at the same block.
However, the transactions have all the patterns that would suggest:
– The Bitcoin is going into custody (input consolidation, new addresses being created… pic.twitter.com/FvH1wBXg1X— Julio Moreno (@jjcmoreno) February 19, 2024
The halving that’s coming in April will reduce the amount of newly mined Bitcoin by half, affecting supply during a period of high demand. The block reward for miners will drop from the current 6.25 BTC to 3.125 BTC for every mined block.
Around 900 BTC is mined daily, and this will drop by half post-halving. With these factors in play, the law of demand and supply places Bitcoin on a growth trajectory.
Bitcoin is trading at around $52,300 at 07:10 EST, the highest level since 2021.
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