Bitcoin balances on exchanges dropped sharply below 2.9 million

The number of bitcoins held on centralized exchanges has fallen to less than 2.9 million, the lowest level in six years. Glassnode's analysis points to a significant reduction in supply of the main cryptocurrency, as exchanges' balances have been gradually shrinking since mid-April.

Over the past few months, more than 150,000 BTC flowed away from exchanges to cold storage wallets. This indicates the tendency of investors to accumulate coins rather than engage in short-term trading.

One of the key factors behind the outflow was the activity of institutional buyers. Between April and July, they purchased a total of more than 100,000 BTC. At the same time, companies transferred 5,898 BTC to long-term storages over the last week.

Another important circumstance is the growing popularity of bitcoin ETFs. Since their appearance on the market, more than 800,000 BTC have been secured in ETF trust wallets. This, in turn, indicates a high demand from traditional investors who want to obtain indirect access to bitcoin. Such actions also reduce the amount of BTC available on trading platforms.