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Crypto investors are not keen on dealing with cryptocurrency trading platforms, which has resulted in Bitcoin and Ethereum’s dwindling foreign exchange reserves. Centralized exchanges on Bitcoin and Ethereum hit all-time lows after investors and crypto enthusiasts opted for self-management 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 on to their crypto assets rather than resell them Bitcoin and ether exchange platforms.
They preferred direct ownership of their assets using self-custody wallets, creating an increasing demand for self-custody solutions. However, it led to a drop in the liquidity of BTC and ETH on centralized exchanges.
Strengthening Bitcoin and Ethereum Values
A positive consequence of traders’ preference for self-management solutions is the increasing value of Bitcoin and Ethereum assets over time. Traders turning away from cryptocurrency trading platforms create a sense of scarcity, which leads to the growth of its value.
At the time of writing, the price of Bitcoin is pegged at $64,842. Since hitting an all-time high of $73,000 in March this year, the price has remained somewhere between $66,000 and $49,000. Meanwhile, according to Coinmarketcap, Ethereum is trading at $2,464.
Bitcoin and Ethereum reserves are falling
Bitcoin and Ethereum on centralized reserves took a nosedive, reaching all-time lows early this month. As of October 13th The CryptoQuant graph showed that the centralized exchanges for BTC recorded an all-time low of 2,666,717 bitcoins.
The highest amount of Bitcoin was set at 3,361,854, which was recorded on June 8, 2022. After that period, Bitcoin declined sharply. The lowest level was reached at the beginning of this month.
In terms of volume, spot exchanges have 1.1 million Bitcoin in reserves, while derivatives exchanges hold 1.39 million reserves. Binance holds by far 563,000 Bitcoin reserves, the largest crypto exchange by trading volume, followed by Kraken with 112,3000 reserves.
On the other hand, Coinbase Advanced has 830,530 Bitcoin reserves and Coinbase Prime has 3,000 reserves. Ethereum’s centralized exchanges are also facing a similar dilemma as Bitcoin, with reserves continuing to decline, hitting a record low of 18.7 million.
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According to CryptoQuant it is derivatives exchanges own a large portion of Ethereum with 10.3 million in reserves, while 8.4 million Ethereum reserves are held on spot exchanges.
Historically, Ethereum’s all-time high in reserves on September 6, 2022 was 2,310,823. Since that period, Ethereum reserves on central exchanges have continued to decline.
In terms of reserves, Coinbase has a large reserve of 4.5 million Ethereum, followed by Binance with 3.6 million Ethereum. Kraken also has a significant Ethereum reserve of 1.3 million.
Featured image from Pexels, chart from TradingView
