The bear market has inspired little ones to accumulate large amounts of Bitcoin (BTC). The number of wallets with 1 BTC or more has recently hit new highs, while those with 10 BTC or less are setting accumulation records.
However, to what extent are these newly minted “wholecoiners” guarding their private keys? Has the recent wave of centralized exchange (CEX) insolvency encouraged Bitcoin enthusiasts to move their bitcoins into cold storage, away from third-party risk?
For Checkmate, principal analyst at Glassnode, the data would point to this result. Checkmate told Cointelegraph: “Overall it looks, at least in the short term, as a move towards self-care. Partly out of concerns about CEX’s solvency.”
“The last few weeks have been the largest monthly decline in exchange balances ever, peaking at 177,900 BTC/month in withdrawal volume.”
He also shared that exchange withdrawals have hit new records as users have taken thousands of Bitcoin from exchanges. The peak is shown in red on the graph.
Customers withdrawing Bitcoin from exchanges have affected the supply of the exchange. The amount of Bitcoin available on exchanges “dropped to its lowest supply % (11.99%) since December 2017. This means that virtually every coin that came in in the last 12 months is gone,” Checkmate observed.
Additionally, according to Glassnode data, exchange withdrawals accounted for “~30% of all transactions in the past few weeks.” The data would suggest a general shift towards self-custody: Bitcoin is being sent to hot or cold wallets.
When Bitcoin investors “withdraw” from exchanges, it can be to an offline hardware wallet, sometimes called cold storage, or to an online (hot) wallet. Hardware wallets or signature devices are tools that manage a user’s cryptocurrency wallet and their private keys. Among the most popular hardware wallets are Ledger, Trezor, and ColdCard; hot wallets include Blue Wallet or Exodus Wallet.
Josef Tětek, a Bitcoin analyst at Trezor, one of the world’s largest hardware wallet providers, has seen a considerable boost in sales in the past month. Tětek told Cointelegraph: “We have seen a dramatic increase in interest in Trezor devices and new Trezor Suite downloads. Our sales are reaching all-time highs in recent weeks.”
“Normally, a bear market is a pretty quiet period for us, so this increase in sales just shows how big an impact the FTX and BlockFi crashes have on people’s confidence in custodial services.”
Cointelegraph had previously reported that Trezor benefited from a 300% increase in hardware sales due to the FTX fiasco. And that despite the fact that the price of Bitcoin has fallen in the middle of the decade.
For Swiss-based Bitcoin exchange Relai, it’s a similar story; the company shared with Cointelegraph that it has seen a ton of new users as well as increased volume since the FTX misadventures.
Imo Bábics, Relai’s chief marketing officer, told Cointelegraph:
“Well, for starters, we don’t have custody. We’ve definitely noticed more people buying bitcoin because of the FTX crash.”
November was the best month in Bitcoin history for the exchange. Relai added: “We know from our friends at ShiftCrypto that there has been a huge increase in demand for their BitBoxes.”
ShiftCrypto is a hardware wallet provider like Trezor. The company’s social networks shared countless stories of users who Recently they became proponents of Bitcoin self-custody after the FTX fiasco.
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