FTX fall motivates self-guard
Recently, new highs have been reached in the number of wallets holding 1 BTC or more. This is a positive indication that investors are determined to hold on to their Bitcoin holdings even when the price drops. Similarly, the number of wallets holding 10 BTC or less has also reached an all-time high.
The recent problem of insolvency of centralized exchanges has been linked to this recent accumulation in cold rooms. The recent accidents of FTX, Voyager, Genesis and other crypto firms have sparked negative sentiments in the market. Investors are increasingly worried about losing their BTC if the exchange fails.
Data from glass knot shows that as a result, exchange balances have dropped significantly, with over 177.9k BTC withdrawn from exchanges over the past month. This trend will likely continue as investors become more aware of the risks of placing their money in centralized exchanges.
Bitcoin investor withdrawals from centralized exchanges have also impacted exchange supply. Bitcoin available on exchanges fell to 11.99%, its lowest since December 2017.
Checkmate, Glassnode’s lead analyst, noted that this looks like at least a short-term move to self-custody, partly out of concern for CEX solvency.
Hardware wallets enjoy strong sales
A market downturn generally does not inspire the spirit of accumulation among investors. However, hardware wallets like TrezorLedger and ColdCard have seen a surge in demand for their products.
Josef Ttek is a Bitcoin analyst at Trezor, a leading hardware wallet provider. He said there had been a “dramatic increase” in demand for Trezor devices and the Trezor suite.
“Normally a bear market is more of a quiet time for us,” he added. “This increase in sales only goes to show the extent of the impact of the FTX and BlockFi collapses on people’s trust in custody services.”
Trezor noted a 300% increase in hardware sales after the FTX fiasco. Additionally, Relay, a bitcoin exchange headquartered in Switzerland, has seen a similar increase in the number of bitcoin users and investors using their platform to trade.