Kraken Reports Highest Bitcoin and Ethereum Outflows Since 2017
Kraken, a well-known cryptocurrency exchange, has recently experienced a significant decrease in its Bitcoin (BTC) and Ethereum (ETH) reserves, marking the largest outflows since 2017. This development has raised concerns about the exchange’s current state and the overall dynamics of the cryptocurrency market.
Insights from Joao Wedson, the founder and CEO of Dominando Cripto, reveal that Kraken’s Bitcoin reserves have dropped to levels not seen since 2018, with approximately 122,300 BTC currently held. Similarly, the exchange’s Ethereum reserves have fallen below one million units, a figure last observed in early 2016. Wedson shared these findings on CryptoQuant, a blockchain analytics platform.
Highlighting the scale of these withdrawals, Wedson stated, “Kraken’s Bitcoin reserves have dropped to the same level as in 2018, now holding 122,300 BTC. For Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.” The outflows are significant, with the exchange witnessing the withdrawal of 49,100 BTC, valued at approximately $3.33 billion, and 572,100 ETH, valued at around $2.15 billion. These substantial movements suggest that Kraken is either strategically repositioning its reserves or that there is institutional activity taking place.
The recent approval of spot Bitcoin and Ethereum ETFs by the Securities and Exchange Commission (SEC) has played a role in influencing these outflows. The increased interest in these ETFs has led to a shortage of supply on exchanges, including Kraken. Since the approval, approximately 777,000 ETH, valued at about $3 billion, have been withdrawn from various exchanges. Additionally, the anticipation of spot Ethereum ETFs trading has contributed to the outflows, as investors are likely moving their assets off exchanges in preparation for ETF-related strategies, which in turn impacts overall liquidity.
These substantial withdrawals have had an impact on the current market conditions. At the time of writing, Bitcoin was trading at $68,974, showing a 0.15% increase in the last 24 hours. Conversely, Ethereum was trading at $3,771, experiencing a slight decrease of 1.07%, according to CoinMarketCap.
Market analysts are closely monitoring these developments, as the outflows and potential supply shock could drive a price surge in the coming months. This possibility is supported by the improving open interest of the derivatives market, which indicates a bullish outlook for Bitcoin. Thomas Fahrer, co-founder of Apollo, even predicted that Bitcoin’s price could reach $3.5 million per coin by 2030, highlighting the potential for significant growth in the cryptocurrency market. However, it’s important to note that this projection is speculative.
There is a noticeable trend away from exchanges as the primary holders of crypto assets. Address screenings suggest that the movements of assets from Kraken were deliberate and rapid, indicating strategic decisions rather than random withdrawals. This aligns with a broader trend where major players are opting for greater self-custody, particularly with increasing institutional involvement.
Market analyst Ali emphasized this trend, stating, “Since the SEC approved spot Ethereum ETFs, approximately 777,000 ETH — valued at about $3 billion — have been withdrawn from crypto exchanges!” This shift towards self-custody reflects investors’ cautious approach to safeguarding their assets amidst fluctuating market conditions.
In conclusion, Kraken’s significant outflows of Bitcoin and Ethereum reserves, combined with the recent approval of spot ETFs and the growing preference for self-custody, are shaping the current state of the cryptocurrency market. As market analysts closely observe these developments, there is anticipation of potential price surges and significant growth in the coming months and years.
