FTX aftermath: Sharp increase in own wallets, miners in trouble

Blockchain analysis shows that more and more bitcoins are being withdrawn from exchanges to their own wallets. The number of bitcoins that have been held unmoved in wallets for a year or more is also at an all-time high. For miners, however, the situation seems to be getting more and more dire.

According to blockchain analytics firm Glassnode, the aftermath of the FTX drama led to an explosive growth in the number of bitcoins being withdrawn from exchanges into proprietary wallets. Withdrawals reached a rate of 106,000 bitcoins per month.?? ??

Only three times before have so many bitcoins been withdrawn from exchanges in such a short time: in April 2020 just after the COVID crash, in November 2020 at the start of the bull market and in June 2022 just after a major price drop.

At the moment there would still be about 2.25 million bitcoin on exchanges. That is the lowest amount of bitcoins on exchanges since the spring of 2018.

Own wallets

The number of bitcoins that are kept in their own wallets ( self custody ) has therefore increased considerably. According to Glassnode, the number of wallets with 1 bitcoin or more increased by 130,000 in the past week. The vast majority of these, about 78,000 wallets, are wallets containing 10 to 1000 bitcoins. The number of wallets with less than 1 bitcoin also grew, by more than 33,000.

Moreover, more and more bitcoins are stored for the longer term. The so-called 1 Year HODL Wave is currently at a record high of over 67%. That is the percentage of bitcoins that have not shown any activity for one year or more, despite price volatility.

Stablecoins

Meanwhile, the amount of stablecoins on exchanges increased. Stablecoins are digital currencies, the value of which is stable and linked to a fiat currency such as the euro or dollar. Most trading of bitcoin on exchanges takes place with such stablecoins. An increase in the amount of stablecoins on exchanges can therefore be an indication of the demand-side purchasing power in the market.

Shortly after the collapse of FTX, more than $1 billion in stablecoins were sent to exchanges in one day, according to Glassnode. In the past month, the total number of stablecoins sent to exchanges reached $4 billion.

Miners

Miners seem to be getting more and more squeezed by the market conditions. Their margins are under extreme pressure because of the hashrate hashrate The hashrate is a way of expressing the computing power of the miners of the Bitcoin network. If the total hashrate is high, relatively many miners are active. However, the amount of bitcoins available for mining remains low. Proportionally, the income per individual miner is lower , which is at record highs, while energy costs are higher and their income in bitcoin has shrunk significantly due to the price drop.

According to Glassnode, miners collectively sold 7,761 bitcoins ??? nearly 10% of their reserves ??? in the past week, and the situation doesn’t seem to be improving for them any time soon.?? ??

Want to read more about blockain analysis and other studies? Then take a look at our other articles.

 

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