Arcane Research says that investors are moving their Bitcoin (BTC) out of exchanges as crypto users increasingly prefer holding their own digital assets.
In a new report, the crypto insights firm says that the benchmark digital asset has been flowing out of exchanges for seven of the past eight months of 2022.
According to the report, Bitcoin deposits saw an uptick in May, but BTC in exchanges plunged again in June as investors withdrew their assets after the collapse of Terra (LUNA).
From a positive net flow of 42,000 BTC in May, the outflow in exchanges was 119,000 BTC in June, the highest since November 2020.
Withdrawals of Bitcoin continued in July and August as several other crypto firms, including hedge fund Three Arrows Capital and crypto lender Celsius Network declared insolvency.
The report says that the amount of Bitcoin flying out of exchanges suggests that holders of BTC are losing their trust in centralized crypto firms.
“The massive bitcoin outflows from centralized counterparties indicate that crypto hodlers are trusting the exchanges and lenders less than before. Bitcoin is increasingly being moved into cold storage, further indicated by the recent sales boost hardware wallet manufacturers like Ledger and Trezor have seen.
Although the counterparty risk for one particular lender or exchange might be small, history has been the kindest to the crypto hodlers who keep the majority of their assets safely in cold storage. It’s always better to be safe than sorry.”
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Warm_Tail
