Latest data Offers Kraken, one of the leading cryptocurrency exchanges on the market, has seen the largest outflows of Bitcoin (BTC) and Ethereum (ETH) since 2017. This indicates a significant shift in digital asset holdings, which could have widespread implications for the market.
Historical Kraken Flows, What's Happening?
Insights from Dominando Cripto's Joao Wedson shared on the fast-paced CryptoQuant platform highlight the amazing trend in Kraken. The exchange recorded an outflow of 49,100 bitcoins, equivalent to about $3.33 billion.
This huge withdrawal represents the largest movement of funds from the exchange in dollar terms. Ethereum was not left behind, as approximately 572,100 Ethereum, worth about $2.15 billion, exited the platform as well.
This significant reduction has seen Kraken's Bitcoin reserves fall to levels last seen in 2018, containing around 122,300 BTC. More importantly, Ethereum reserves fell below 1 million for the first time since early 2016.
Kraken: the largest $ Bitcoin And $ Ethereum Outflows since 2017!
“Kraken #Bitcoin Reserves have fallen to the same level as in 2018, now containing 122,300 BTC. to #EthereumThis is the first time Kraken reserves have fallen below 1 million units, a level not seen since early 2016. – By… pic.twitter.com/pS4kEajpHF
— CryptoQuant.com (@cryptoquant_com) June 3, 2024
While this news may seem alarming at first, Widson reveals that head scans indicate that the asset movements were “simultaneous and rapid”, suggesting that these outflows may have been a strategic repositioning of reserves by Kraken itself, Or part of a corporate strategy.
Expect supply pressure and higher prices
Meanwhile, the timing of these moves is crucial, as they come as the market absorbs the impact of the recent SEC approval of Ethereum ETFs.
This regulatory approval has accelerated the process of reducing the price of Ethereum available on centralized exchanges, raising expectations of a potential supply squeeze that could positively impact the price of Ethereum.
The broader context includes a significant shift away from exchanges as the primary holders of cryptocurrency assets. Market analyst Ali pointed to a sharp decline in Ethereum held on exchanges, with around 777,000 ETH withdrawn following ETF approval, indicating an evolving market dynamic where major players may move towards more self-custody amid growing institutional participation.
since @SECGov Spot approved #Ethereum ETFs, about 777,000 $ Ethereum – An estimated value of approximately $3 billion – was withdrawn from #encryption Exchanges! pic.twitter.com/EzQVC0cw27
– Ali (@ali_charts) June 2, 2024
This trend is supported by a broader analysis of exchange balances, which shows a Continuous declineThis indicates a strengthening preference for holding cryptocurrencies outside of exchange platforms.
Such movements are traditionally viewed as bullish indicators, implying decreased selling pressure and increased long-term holding behavior among investors.
At the time of writing, Ethereum is trading at $3,777, after peaking at $3,850 over the past 24 hours. The current trading price represents an increase of 0.7% in the past day despite a decline of approximately 5% over the past week. Meanwhile, Bitcoin is currently at $69,253, having retreated from a 24-hour high of $70,188.
Featured image created with DALL-E, chart from TradingView
