The heightened crypto regulatory scrutiny in the United States led by the Securities and Exchange Commission (SEC) has significantly influenced investment behavior. With Binance and Coinbase Global Inc. (NASDAQ: COIN) under the radar of the SEC for allegedly listing unregistered securities, most crypto investors prefer storing their assets under non-custodial platforms. Moreover, there is an increased risk of the SEC gaining access to users’ funds and freezing them, which could be a huge inconvenience.
Bitcoin Supply on Exchanges on a Freefall
According to an on-chain study conducted by market intelligence platform Santiment, Bitcoin’s supply on exchanges has reached its lowest level since February 2018. As a result, Santiment concluded that the increased traders’ fear, following the legal charges on Binance and Coinbase, has caused the migration en masse.
Additionally, the platform noted that the current supply of Bitcoin on exchanges is about 6.4 percent compared to 16 percent during the 2020 Black Thursday.
📉 #Bitcoin‘s exchange supply has now fallen to its lowest level since February, 2018. Traders continue moving $BTC to self custody during the uncertainty surrounding #Binance & #Coinbase. As long as these #SEC lawsuits loom, this trend should continue. https://t.co/CBOxJ8oA07 pic.twitter.com/c7MQyMswgp
— Santiment (@santimentfeed) June 14, 2023
Santiment expects the trend to continue as long as the SEC lawsuits strike the crypto firms. Moreover, crypto users feel safer holding their digital assets in a self-custody wallet that provides security key phrases for enhanced protection.
The increased fear in the crypto market has reduced the overall trading volume and liquidity. As a result, Bitcoin price has recently struggled to recover $26k as a support level. With the weekly 200 MA acting as a resistance level, the Bitcoin bears are expected to reign in the coming weeks.
Source: https://coinpedia.org/bitcoin/santiment-reports-bitcoin-btc-supply-on-exchanges-reaches-lowest-level-since-2018/