More than 43,000 Bitcoins Leave the Exchanges; Largest One-Day Withdrawal Since 2017

December 10th was marked by Bitcoin’s largest single-day withdrawal from trading since 2017.

Holders withdrew around 43,000 BTCs in just 24 hours.

One likely cause of the withdrawals would be U.S. regulators trying to crack down on self-hedged portfolios.

The Trust Project is an international consortium of media organizations based on transparency standards.

On December 10,holders of 43,000 BTCs withdrew their bitcoins from the exchanges. This marks the largest removal of BTCs from the exchanges since August 24, 2017.

Bitcoin’s exits from the exchanges may indicate that more investors are considering retaining the asset on a long-term basis. However, this may also be related to recent regulatory whispers from the United States.

Falling number of BTCs on the exchanges

Thursday was marked by BTC’s largest withdrawal from 24-hour trading since 2017. More than 43,000 BTCs (approximately $766 million in today’s trading) left the trading floor. As a percentage of total trading balances, the decline was about 1.81%.

In terms of exchange balances, more BTCs were withdrawn yesterday than on any other day since August 2017. At that time, exchange users had withdrawn approximately 50,000 BTCs (then worth approximately $135 million) in a single day.

The data, cited by Arcane Research, comes from Glassnode, although the tweet has since been removed.

Update: The above tweet was removed after Arcane Research confirmed that the decline in BTC balances was due to „internal Binance movements“.

The 2017 exodus of exchanges preceded the fork in the Bitcoin / Bitcoin Cash chain. During these controversial hard forks, every address on the network receives all the new corners created as a result of the fork.

With the hard fork approach and many exchanges not knowing whether or not they would credit users with the newly created coins, many chose to move their BTCs to self-hosted wallets.

However, this time there is no impending hard fork for the Bitcoin network. This indicates that the pattern behind the massive withdrawals is entirely different.

Switching to good holders?

Several different patterns could be behind the widespread BTC withdrawals observed on Thursday, December 10th. Although there is no hard fork ahead, the recent drop in price could have seen short-term and more casual speculators selling their Bitcoins to more committed holders. This seems plausible, especially given recent bullish developments in the industry.

Another interpretation could be that more and more investors are interested in exploring DeFi’s passive revenue-generating potential. Projects such as Wrapped Bitcoin (WBTC) allow BTC to be represented as tokens on Ethereum to interact with DeFi protocols.

However, BTC on Ethereum, a website that tracks the number of ERC-20 tokens representing BTCs, shows no sudden increase in the number of WBTCs or similar projects. In fact, the number of BTC on Ethereum tokens has been declining since its peak in mid-November.

BTC ETH

As BeInCrypto recently reported, Thursday’s withdrawals follow growing concerns about proposed regulations that would require exchanges to impose „know-your-customer“ (KYC) controls on users attempting to withdraw to self-hosted wallets.

Leading industry figures, including Brian Armstrong of Coinbase, rejected the idea, arguing that such policies would stifle the innovative potential of cryptography. Similarly, on December 9, members of Congress wrote to U.S. Treasury Secretary Steven Mnuchin expressing their own reservations about the proposed regulations.

With growing concern, it seems very likely that many users who hold their Bitcoins on the exchanges will withdraw before any real regulatory changes take place.