“The understated angle is that this metric documents the end of the era of exchange custody,” said Ben Nadareski, CEO of Solstice. The bigger story may not be lower currency balances per se, but where those assets are moving to.
“Assets are leaving trading venues for two destinations: regulated custody on the one hand, productive onchain positions on the other,” he said.
Furthermore, the argument that bull runs always follow a steady decline in the currency balance is not necessarily true. For example, the supply of exchanges in 2022 remained low, but prices crashed hard.
HODLing is real
Although the indicator may not be as reliable as before, it does not change the fact that BTC is being accumulated by a variety of market participants in anticipation of a price increase.
“Over 130 public companies now have bitcoin on their balance sheets, and spot ETFs have absorbed a growing share in regulated custody,” Zalan said.
According to Bitcoin Treasuries, public companies hold about 1,264,579 BTC, private 281,752, government entities 649,954, DeFi and other protocols 369,595, while ETFs and exchanges hold 1,622,533. Its data also shows that financial companies hold about 7.252 million ETH.
Combined with nearly 7 million bitcoin in dormant wallets, a total of just under 11.2 million bitcoin is sitting outside of active trading, which is about 56.5% of the currently circulating supply of about 20.05 million.
