The amount of Bitcoin (BTC) held by crypto exchange BitMEX has fallen by 25% in the past few weeks.
During the crypto bloodbath on March 12, Bitcoin (BTC) fell 50% from a price over $10,400 on March 12. Mass liquidations on BitMEX were believed to play a big role in the crypto crash. Ever since, the amount of Bitcoin held on the platform has decreased significantly.
According to data collected by CoinMetrics, on March 13, BitMEX held approximately 315,000 BTC. This number has dropped to 244,000 BTC as of March 29.
The amount of Bitcoin held by BitMEX has been in freefall over the past two weeks after BitMEX experienced mass liquidations on March 13th.
— CoinMetrics.io (@coinmetrics) March 31, 2020
As of March 29th, BitMEX held 244k BTC, down from a peak of 315k on March 13th.
Read more: https://t.co/cC66MWe4d2 pic.twitter.com/liB6GVkLwg
The reasons for the plunge aren’t entirely clear. Investors may simply be withdrawing their crypto to cold storage in the face of an uncertain market or BitMEX may have decided to reduce its own exposure to BTC. However the outflows could also signify a lack of confidence in BitMEX itself — following the crypto bloodbath liquidity on the exchange’s BTC futures dried up.
Others suggest that it may simply be a result of large players and institutional investors deciding to get out of the space entirely during the current crisis.
Investors moving Bitcoin to private wallets or liquidating
BitMEX isn’t the only exchange to see a drop in its Bitcoin holdings. Data assembled by Glassnode shows withdrawals have been increasing since March 18, bringing the amount of BTC on exchanges to their lowest levels in roughly eight months.
Despite the volatility, #Bitcoin holders appear to be withdrawing their funds from exchanges. Outflow has been increasing daily since March 18.
— glassnode (@glassnode) March 26, 2020
According to our labels, $BTC exchange balances are the lowest they've been in ~8 months.https://t.co/iwiDqNlvuI pic.twitter.com/mnPb5vj6Yu
Glassnodes said traders may have simply chosen to maintain custody of their own assets, or have decided to cease trading and hold for the long term, or that they may be concerned about the liquidity of crypto exchanges amid the market downturn.
Turning to stablecoins instead of BTC?
While Bitcoin is holding up relatively well under the circumstances, the outflows of Bitcoin from exchanges could be due to expectations of further price falls. Adding weight to that interpretation is the movement of capital into stablecoins such as Tether (USDT), which recently hit a new all-time high balance on exchanges.