On January 17th, a staggering $120 million worth of Bitcoin (BTC) was withdrawn from exchanges, marking the second-largest withdrawal in over a month. It followed the most recent significant withdrawal when over $200 million worth of BTC left exchanges.
The recent collapse of Sam Bankman-Fried’s FTX has sparked fears among investors over the safety of their assets, leading to a record number of Bitcoin withdrawals from crypto exchanges.
In the aftermath of the collapse of FTX last year, investors have taken swift action to protect their assets. According to data from CryptoCompare, a total of 91,363 BTC, worth close to $1.5 billion based on the November average price of around $16,400, were withdrawn from centralized exchanges, including Binance, Kraken, and Coinbase.
It marks the largest Bitcoin outflow on record at that time, as investors sought to safeguard their funds following the exchange’s failure, potentially leaving more than 1 million creditors in its wake. While the massive outflows journey started afterward. However, it is unclear whether investors sell off or move their Bitcoin to private wallets for safekeeping.
According to a December 25th report by TronWeekly, 18.19 million Bitcoins were removed from exchanges. “The most recent statistic of 1.16 million represents the lowest level of its supply on exchanges since November 2018.”
Another report by December 28th observed a surge in daily withdrawals of $265.6 million worth of BTC from centralized exchanges, with a net flow of negative $43.1 million. Investors had been steadily moving BTC to decentralized exchanges. Meanwhile, BTC saw a daily net flow of over $1.8 million, while the leading stablecoin, Tether, reached $57.5 million.
Bitcoin Recorded Second Worst Annual Performance
The cryptocurrency market experienced a rough end to the year, with digital assets continuing to decline in December. Despite the market downturn, volatility levels decreased compared to November due to FTX drama, according to a report by CryptoCompare.
Bitcoin, the largest coin, finished the year with a 64.2% loss, marking its second-worst annual performance in its 13-year history. In line with the market decline, trading volumes also dropped significantly. BTC specifically saw a 42.6% month-on-month decline in USDT volumes across centralized exchanges, signaling a decrease in investor activity.
However, among other digital assets, BTC had the least volatility, ending the year with 30-day volatility of 27.9%, slightly above its annual low of 26.8%.
Despite the decline in volumes, BTC maintained its dominance in the market, accounting for 47.0% of the total spot volume on centralized exchanges in December, just 0.20% behind its market share in August.
It, coupled with its relatively solid performance against other cryptocurrencies, has made Bitcoin the preferred asset for traders and investors.