Cryptocurrency exchange Kraken has seen its the largest Bitcoin (BTC) and Ethereum (ETH) outflows since 2021.
Crypto Exchanges See Huge Drop in Bitcoin And Ethereum
Blockchain analytics platform CryptoQuant, quoted a post from the founder and CEO of Dominando Cripto Joao Wedson, detailing the magnitude of the recent exchange supply crunch.
According to Wedson, “Kraken’s #Bitcoin reserves have dropped to the same level as in 2018, now holding 122,300 BTC. For #Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.”
Kraken: Largest $BTC and $ETH Outflows Since 2017!
“Kraken’s #Bitcoin reserves have dropped to the same level as in 2018, now holding 122,300 BTC. For #Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.” – By… pic.twitter.com/pS4kEajpHF
— CryptoQuant.com (@cryptoquant_com) June 3, 2024
This hype around spot Bitcoin ETFs and much more recently, spot Ethereum ETFs has contributed to predisposing Kraken to this position. Investors interested in cryptocurrencies have seen a meteoric rise in the last five months fueled by the launch of spot Bitcoin ETFs. Many crypto enthusiasts have consistently bought into the market both for the purpose of expanding their financial portfolios as well as in response to the Fear of Missing Out (FOMO) on important bullish trends.
The high demand for cryptocurrencies like Bitcoin and Ethereum have caused many exchanges some discomfort including Kraken. Crypto reserves on exchanges are beginning to dry up. The Ethereum ETF approval from the Securities and Exchange Commission (SEC) is barely a week old and exchanges are beginning to experience a drought.
As of June 2, more than 777,000 ETH, valued at about $3 billion have been withdrawn from crypto exchanges. It is worth noting that trading of spot Ethereum ETFs has not commenced yet but there’s expectation that S-1 registrations will be approved soon.
At this rate, these digital assets are gradually inching towards a supply shock, a move that would likely impact on their prices in the long run.
Effect of Supply Shock on Bitcoin Price
Currently, Bitcoin is trading at $69,252.47 with a 1.75% increase within the last 24 hours while Ethereum is at $3,787.97 but is down by 0.21%. With the current situation on crypto exchanges, their prices may see a significant surge in the next few months. At this same time, this potential outlook could be fueled by other growth factors asides the supply shock.
Analysts strongly believes in the outlook of the derivatives market open interest (OI) as it has greatly improved Bitcoin’s bullish outlook to a reasonable extent.
While the market expects a tremendous growth in the price of Bitcoin, Apollo co-founder Thomas Fahrer made a dramatic prediction about the coin. Precisely, Fahrer predicted that the Bitcoin price could reach $3.5 million per coin by 2030. Bitcoin’s current price trend does not show for certain if Apollo’s co-founder is on track. However, a jump in Bitcoin price might equally trigger a surge in the market value of other digital assets.
Read More: Binance, Kraken Face Legal Action For Delisting Bitcoin SV Over CSW’s Satoshi Claims
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
✓ Share: