Bitcoin is said to be the subject of a record desertion within crypto exchanges. A phenomenon that testifies to the profound upheavals caused by the crisis.
Holders’ confidence in crypto exchanges at an all-time low?
Since the onset of the cryptocurrency crisis, the industry has continued to transform. Between bankruptcies and downsizing of the teams, the priorities of the industry actors seem to change completely. However, the phenomenon does not stop with them. Crypto holders also bear the brunt of transformations and are following suit.
According to a study published by Arcane Research, more and more Bitcoin holders are leaving crypto exchanges. Since the beginning of 2022, many tokens have been withdrawn continuously, marking a dark year for companies offering such services. In the past eight months, only the month of May has been positively positioned with an entry of 42,000 BTC. The downward phenomenon also peaks at the beginning of the crypto winter, with an outflow of 119,000 tokens.
Although the month of August seems a bit more lenient, the flight of holders is nevertheless negligible. Indeed, this could be the result of a massive loss of trust within the crypto sector. The bankruptcies of certain platforms have shown users that these funds could lose their assets or face a blockage. the crypto exchange Coinbase had also confirmed these risks, arguing that customer funds could indeed be withheld by the company in case of concern.
According to Arcane Research, the revoked tokens may simply be stored in cold crypto wallets. Not subject to the whims of the platforms, these are the responsibility of the holder. Following the wave of hacks that has raged within crypto in recent days, the popularity of Ledger or Trezor wallets is at its peak.
A phenomenon that has no end yet?
After the peak of withdrawals suffered by the platforms in the month of June, the situation seems to be improving a bit. Cryptocurrencies slowly but temporarily stabilized while foreclosures within the crypto sector appeared to slow down. However, the industry is facing two new problems.
Barely recovered from the crisis, and while it doesn’t seem to be over yet, the different players face various security, theft and regulatory challenges. Under their thumb, users seem to be withdrawing their tokens to protect them from hackers or government surveillance.
The desertion of BTC holders thus seems to be the result of a loss of confidence but also of the transformation of the sector. Users’ priorities are now very different: protecting themselves while waiting for the crypto to improve instead of making money at all costs, on pain of losing everything.
As for cryptocurrency purists, they could take flight after Bitcoin’s correlation with traditional markets. While the little orange piece was an alternative to the latter, their approach to the industry may put some users off. The surveillance that the regulations bring can also make lovers of anonymity want to leave. The purge would therefore allow some holders to re-entrust their tokens to crypto exchanges… but early investors’ returns don’t seem so guaranteed.
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