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Cryptocurrency investors are not keen on dealing with cryptocurrency trading platforms, which has led to dwindling exchange reserves of Bitcoin and Ethereum. Centralized exchanges on Bitcoin and Ethereum have reached a historic low after investors and cryptocurrency enthusiasts opted for self-custodial solutions for their virtual assets.
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Stay away from cryptocurrency trading
A recent trend has shown that traders and other enthusiasts are choosing to hold their crypto assets rather than sell them Bitcoin and Ethereum Exchange platforms.
They preferred direct ownership of their assets using self-custodial wallets, which led to increased demand for self-custodial solutions. However, this has reduced the liquidity of BTC and ETH on centralized exchanges.
Boosting the values of Bitcoin and Ethereum
A positive consequence of traders’ preference for self-custody solutions is that the value of Bitcoin and Ethereum assets increases over time. Traders moving away from cryptocurrency trading platforms creates a feeling of scarcity, which causes their value to grow.
At the time of writing this report, it was Bitcoin price It was pegged at $64,842. Since hitting a record high of $73,000 in March of this year, the price has remained somewhere between $66,000 and $49,000. Meanwhile, according to Coinmarketcap, Ethereum It is trading at $2,464.
Decrease in Bitcoin and Ethereum reserves
Bitcoin and Ethereum have fallen on central reserves and reached historic lows early this month. As of October 13, CryptoQuant chart It showed that BTC central exchanges hit an all-time low of 2,666,717 BTC.
The highest amount of Bitcoin was pegged at 3,361,854, which was recorded on June 8, 2022. After that period, Bitcoin witnessed a sharp decline. It reached its lowest levels at the beginning of this month.
In terms of volume, spot exchanges have a reserve of 1.1 million bitcoins, while derivatives exchanges have a reserve of 1.39 million. To date, Binance has 563,000 Bitcoin reserves and is the largest cryptocurrency exchange by trading volume, followed by Kraken with 1,123,000 reserves.
On the other hand, Coinbase Advanced has 830,530 Bitcoin reserves, while Coinbase Prime has 3,000 reserves. Centralized exchanges for Ethereum are also facing a similar dilemma to Bitcoin, as their reserves continue to decline, reaching a record level of 18.7 million.
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According to CryptoQuant, Derivative exchanges It holds a large portion of Ethereum with 10.3 million reserves, while 8.4 million Ethereum is held on spot exchanges.
Historically, the all-time high level of Ethereum reserves was 2,310,823 recorded on September 6, 2022. Since that period, Ethereum reserves on centralized exchanges have continued to decline.
In terms of reserves, Coinbase has a large reserve of 4.5 million ETH, followed by Binance with 3.6 million ETH. Kraken also has a large Ethereum reserve of 1.3 million.
Featured image from Pexels, chart from TradingView