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BTC Liquidity Dwindles as ETFs Absorb Record Supply
The amount of Bitcoin held on centralized exchanges continues to fall sharply, signaling a major structural shift in market behavior. According to market intelligence platform Santiment, there are now at least 400,000 fewer BTC on exchanges compared to the same period last year — a trend historically linked to reduced sell-side pressure.
Over 403,000 BTC Exit Exchanges in 12 Months
Santiment reported that more than 403,000 BTC, roughly 2% of Bitcoin’s total supply, has moved off exchanges since Dec. 7, 2024, based on data from its sanbase dashboard.
This type of movement usually suggests that users are transferring their holdings into cold storage, making those coins harder to sell and implying longer-term holding intentions.
As Santiment explained:
“In general, this is a positive long-term sign. The less coins exist on exchanges, the less likely we’ve historically seen a major sell-off that causes downside pressure for an asset’s price.”
The platform added that as Bitcoin trades near $90,000, the broader trend supports continued outflows from trading venues:
“As Bitcoin’s market value hovers around $90K, crypto’s top market cap continues to see its supply moving away from exchanges.”
While a large portion of withdrawn BTC is likely moving to personal custody, some of it is being absorbed by exchange-traded funds (ETFs).
Giannis Andreou, founder and CEO of Bitmern Mining, said ETFs and public companies now hold more Bitcoin than all exchanges combined, citing BitcoinTreasuries.Net.
According to Andreou:
“Institutional ownership has quietly crossed into a new phase: less liquid supply, more long-term holders, stronger price reflexivity, a market driven by regulated vehicles, not trading platforms.”
He described the trend as larger than most observers realize:
“This shift is bigger than people think. Bitcoin isn’t moving to exchanges anymore. It’s moving off them straight into institutions that don’t sell easily. The supply squeeze is building in real time.”
Separate data from CoinGlass reinforces this shift. As of Nov. 22 — when BTC was trading near $84,600 — exchanges collectively held around 2.11 million BTC.
Meanwhile, BitBo data shows that ETFs now hold over 1.5 million BTC, and public companies control more than 1 million BTC. Combined, that represents nearly 11% of Bitcoin’s total supply held by institutional vehicles.
This steady transition of Bitcoin from exchanges to long-term custodians marks a significant shift in market structure and continues to reduce the amount of liquid supply available for short-term trading.
