Over 400,000 BTC Leaves Exchanges Amid Rising Institutional Demand

New on-chain data shows that a large amount of bitcoin has been withdrawn from crypto exchanges over the past year. More than 400,000 BTC—around two percent of all bitcoin in circulation—has moved into private storage since December 2024, according to analysis from Santiment.

Good to Know

• Exchange balances have dropped by more than 400,000 BTC in one year.
• Investors increasingly choose private wallets over keeping coins ready for sale.
• ETFs and listed companies now hold more bitcoin than all exchanges combined.

Long-Term Holding Trend Accelerates as Exchange Balances Shrink

With bitcoin trading near 90,000 dollars, a clear pattern is emerging: more investors prefer storing coins off exchanges rather than keeping them in positions that allow quick selling. When BTC remains on an exchange, it can be liquidated instantly. Moving coins into personal wallets generally reflects a longer investment horizon and reduced short-term selling intent.

Santiment notes that lower exchange supply often aligns with reduced selling pressure during market corrections. A smaller pool of readily available BTC typically limits the risk of large batches hitting the open market at once, which can support stability and price resilience over extended periods.

About 1.8 million BTC sat on exchanges a year ago, a figure that has fallen significantly. The continuous decline underscores a strong preference for long-term holding among both retail and institutional users.

Institutional Accumulation Expands as ETFs Absorb Massive Supply

Large bitcoin holders also play a growing role in this shift. Data from BitcoinTreasuries and BitBo shows that public companies and bitcoin ETFs combined now possess more BTC than all spot exchanges. ETF vehicles hold more than 1.5 million BTC, while publicly traded companies control over one million BTC. Together, these entities manage close to eleven percent of the maximum supply.

Industry observers argue that the market has entered a new phase. Mining firms and exchanges increasingly transfer freshly mined or circulating bitcoin directly into the hands of institutions that rarely sell. This reduces the number of coins trading freely on open markets and further compresses supply.

The combination of falling exchange balances and accelerating institutional accumulation could create conditions for a future supply squeeze. With fewer coins available to purchase and demand trending upward, price appreciation can intensify quickly once buyers compete for limited supply.

Some analysts also suggest that broader distribution into long-term holders may contribute to steadier market behavior. When a larger share of BTC sits in wallets that seldom shift assets, sharp price swings may become less common compared with earlier cycles dominated by active trading.