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Analysis of cryptocurrency exchange wallets shows holdings are decreasing
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[Image: austin-neill-685080-unsplash-1200x675.jpg]
Analysis of cryptocurrency exchange wallets shows holdings are decreasing

QUICK TAKE
  • There are currently 716k bitcoin (4% of circulation), 7M ether (7% of circulation) and 1.2B tether (64% of circulation) held in the publicly known wallets of crypto exchanges
  • In the last three months, exchange wallet balances decreased by 6% for both bitcoin and ether but by 40% for tether
  • The decrease could indicate either lower levels of speculation or that customers are withdrawing their cryptocurrencies to their own wallets
  • Out of the tracked exchanges, Binance, currently stores the largest amount of crypto holdings, amounting to more than $1.5 billion just from bitcoin, ether and tether holdings combined

There are currently approximately 716,000 bitcoins (4.1% of circulation), 7 million ether (6.8% of circulation) and 1.2 billion tether (63.5% of circulation) held in the publicly known wallets of crypto exchanges according to research conducted by The Block (see the table). It’s important to note that:
  • the included exchanges could control even more wallets, which are not publicly known

  • some major exchanges including Coinbase and BitMEX, which hold significant amounts of cryptocurrencies on behalf of customers, do not have publicly known wallets so they are not included in this summary

Coinbase said that it migrated as much as 5% of bitcoin in circulation and 8% of all ethereum in December due to the scheduled wallet maintenance. But Coinbase’s wallets are not publicly known so their claims couldn’t be verified. BitMEX’s wallets reportedly hold at least 1% of bitcoin in circulation. Following these two claims, at least 10% of all bitcoin in circulation is currently held in the wallets of exchanges. 

The exchange wallet balances of bitcoin decreased by the average of nearly 6% from the beginning of early October. This could indicate that there are either lower levels of speculation or that customers are withdrawing cryptocurrencies to their own wallets. The wallet balances of Bitfinex, Kraken and Poloniex decreased the most in the last three months while Huobi added the most. This could be a good proxy for the success of exchanges since the deposited cryptocurrencies are often used for trading. If the balances are decreasing, it could indicate that the exchange is losing business.


[Image: Screen-Shot-2019-01-08-at-12.57.57-PM-800x429.png]


If we look at exchange holdings of ether, there are currently approximately 7 million ether (6.8% of all ether in circulation) held in the publicly known wallets of crypto exchanges (see the table). Similarly to bitcoin, the exchange wallet balances decreased by a little over 6% from the beginning of early October. The wallet balances of Gemini, OKEx and Gate.io decreased the most in the last three months while Bittrex and Kraken added the most.


[Image: Screen-Shot-2019-01-08-at-12.58.23-PM-678x450.png]


Exchanges’ Tether holdings are interesting to track as well. Unsurprisingly, all of the tracked exchanges have decreased their Tether holdings significantly. On average, the exchanges have decreased their exposure to Tether by nearly 40%, considerably more than 6% for both bitcoin and ether. This coincides with Tether destroying 500M USDT in late October as well as with the rise of the so-called regulated stablecoins – USDC, Paxos and Gemini dollar.


[Image: Screen-Shot-2019-01-08-at-12.58.52-PM-800x419.png]



Binance currently has the most crypto holdings, more than $1.5 billion just from bitcoin, ether and tether combined. Followed by Huobi ($904M), Bitfinex ($824M), Bittrex ($708M) and Kraken ($570M). For all of the other exchanges, there is not enough publicly available data. The share of BTC, ETH and USDT of exchange wallets can be seen below:


[Image: Screen-Shot-2019-01-08-at-4.26.35-PM-731x450.png]
[Image: Screen-Shot-2019-01-08-at-4.26.47-PM-730x450.png]
[Image: Screen-Shot-2019-01-08-at-4.26.56-PM-727x450.png]
[Image: Screen-Shot-2019-01-08-at-4.27.06-PM-729x450.png]
[Image: Screen-Shot-2019-01-08-at-4.27.16-PM-729x450.png]

Exchanges decreasing cryptocurrency holdings likely means that there is less speculation than there was three months ago. Since balances can’t be faked, they can also be used as a proxy to traded volume. Thus the trend of decreasing balances likely also points to decreasing traded volume.


source theblockcrypto.com
by Larry Cermak
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