Bitcoin investors demand greater control over their investments as the banking sector becomes increasingly unreliable. It has led to a surge in self-custody withdrawals, with significant amounts of BTC leaving the markets.
Self-custody of Bitcoin has always been an attractive feature for investors. It allows them to control their investments without needing a bank or other third party. However, recent concerns in the banking sector have led to a surge in self-custody withdrawals.
Yesterday marked a significant shift in self-custody, as there was a notable surge in withdrawals compared to the last six months. This trend has persisted, with approximately 70,000 BTC moving into self-custody since SVB’s collapse last Friday.
SVB’s failure has caused widespread concern among investors regarding the safety of their investments. As the banking sector becomes more unpredictable, more investors opt for self-custody to gain authority over their Bitcoin holdings.
Bitcoin As Global Liquidity Indicator Amid COVID-19 Pandemic
Bitcoin, the world’s largest cryptocurrency, is gaining a new reputation as a global liquidity indicator amid the ongoing COVID-19 pandemic. While it has been viewed as an inflation hedge in the past, recent insights suggest that it could provide valuable insights into the expansion or contraction of balance sheets.
According to experts, Bitcoin’s highly correlated relationship with the net liquidity indicator is an important factor to consider. The net liquidity indicator, which measures the difference between the Federal Reserve’s balance sheet and the Treasury’s general account, has grown significantly year-to-date.
The balance sheet growth of Japan and China is counteracting the Federal Reserve and European Central Bank’s efforts to engage in quantitative tightening. Despite these attempts, the combined balance sheet of the four largest central banks, namely the United States, Japan, China, and Europe, has increased from $25.6 trillion to $26 trillion this year.
However, dwindling order book depth is raising liquidity concerns in the crypto markets. It could lead to violent price fluctuations, either upside or downside. Therefore, experts are urging investors to remain cautious and vigilant as Bitcoin continues to serve as an important indicator of global liquidity in these uncertain times.
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