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Over $1.5 billion in BTC withdrawn in a week

Over $1.5 billion in BTC withdrawn in a week

Last week, bitcoin (BTC) pulled out of exchanges as users became fearful of security and regulatory scrutiny.

Data from the network monitoring resource Coinglass shows that US exchanges, in particular, are seeing a significant reduction in BTC balances.

US exchanges lead to BTC exodus

In the wake of the FTX scandal, social media efforts have stepped up to draw attention to the risk associated with holding BTC in custody.

Users appear to have heeded the warning, withdrawing more than $3 billion worth of crypto in the week immediately following the solvency fiasco and ordering a record number of hardware wallets.

Meanwhile, the fallout from FTX is just beginning, and as regulators plan their investigations and focus more on crypto in general, investor anxiety continues to grow.

The data shows that the trend is still in place when it comes to withdrawing funds from exchanges. Over the past seven days, net withdrawals have exceeded deposits on virtually every major platform.

The biggest weekly decline comes from Gemini, at almost 30,000 BTC, followed by Kraken, Binance and Coinbase.

Unsurprisingly, US exchanges have faced particularly large withdrawals, whose jurisdiction is set to play a key role in the FTX saga going forward.

This week, lawmakers announced a special hearing over what happened on the exchange, with its former CEO, Sam Bankman-Freed, reportedly due to be extradited to the US from the Bahamas.

“The fall of FTX caused huge damage to more than one million users, many of whom were ordinary people who invested their hard-earned savings in the FTX cryptocurrency exchange only to see it all disappear within seconds,” Maxine Waters , This was announced by the chairman of the US House of Representatives Financial Services Committee, which will host a hearing quoted by mainstream media.

Meanwhile, Coinglass figures show that even those exchanges that were not affiliated with FTX were unable to stop the outflow.

In just one week, 134,000 BTC left their accounts, equivalent to about $2.2 billion at current prices, of which about $1.5 billion came from US platforms.

Bitcoin exchange balance chart. Source: Coinglass

“Acute Financial Crisis”

As Cointelegraph reported, while withdrawals on exchanges have skyrocketed, the average BTC hodler remains significantly lower – and therefore less than prone to selling.

Related: Bitcoin Price Drops To $16.4K On Genesis Trouble As Executives Defend GBTC

Network analytics company data glass knot confirms this. The average long-term holder (LTH) — a person who owns coins for at least 155 days — is in the red by 33%.

This is almost unprecedented and only corresponds to the pit of the 2018 bear market when the average reached 36%.

The accompanying commentary states that LTH are experiencing “acute financial difficulties”.

Annotated chart of unrealized Bitcoin LTH losses. Source: Glassnode/Twitter

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