Recent data reveals that Kraken, a cryptocurrency exchange, has witnessed its largest outflows of Bitcoin (BTC) and Ethereum (ETH) since 2017. This significant shift in digital asset holdings raises questions about the current state of the exchange and the broader dynamics of the cryptocurrency market.
According to Joao Wedson, founder and CEO of Dominando Cripto, Kraken’s Bitcoin reserves have dropped to levels not seen since 2018, currently holding approximately 122,300 BTC. Similarly, its 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.
Wedson stated, “Kraken’s Bitcoin reserves have reached the same level as in 2018, currently holding 122,300 BTC. As for Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.”
The scale of these withdrawals is substantial. The exchange experienced an outflow of 49,100 BTC, valued at roughly $3.33 billion, and 572,100 ETH, valued at around $2.15 billion. These significant movements suggest that Kraken is strategically repositioning its reserves or that institutional activity is taking place.
The recent approval of spot Bitcoin and Ethereum ETFs by the Securities and Exchange Commission (SEC) has influenced these outflows. The increased interest in these ETFs has led to a supply shortage on exchanges, including Kraken. Since the approval, approximately 777,000 ETH, valued at about $3 billion, have been withdrawn from various exchanges.
Even though trading of spot Ethereum ETFs has not yet begun, the anticipation of their availability has contributed to the outflows. Investors are likely moving their assets off exchanges in preparation for ETF-related strategies, which is impacting overall liquidity.
These substantial withdrawals are reflected in the current market conditions. Bitcoin is trading at $68,974 at the time of writing, showing a 0.15% increase in the last 24 hours. Conversely, Ethereum is trading at $3,771, experiencing a slight decrease of 1.07%, according to CoinMarketCap.
Market analysts are closely monitoring these developments. The outflows and potential supply shock could drive a price surge in the coming months. This scenario is supported by the improving open interest of the derivatives market, which indicates a bullish outlook for Bitcoin.
Thomas Fahrer, co-founder of Apollo, predicts that Bitcoin’s price could reach $3.5 million per coin by 2030. While this projection is speculative, it highlights the potential for significant growth in the cryptocurrency market.
The trend of shifting away from exchanges as primary holders of crypto assets is becoming more evident. Address screenings suggest that the movement of assets from Kraken was deliberate and rapid, implying strategic decisions rather than random withdrawals. This aligns with a broader trend where major players opt for greater self-custody as institutional involvement in the market continues to rise.
Market analyst Ali emphasizes, “Since the SEC approved spot Ethereum ETFs, approximately 777,000 ETH — valued at about $3 billion — have been withdrawn from crypto exchanges!”
This trend indicates that investors prefer long-term holding behaviors, which reduce selling pressure and potentially stabilize the market. The move towards self-custody reflects a cautious approach by investors who aim to protect their assets amidst fluctuating market conditions.
