Bitcoin’s presence on cryptocurrency exchanges has dropped to its lowest level in nearly seven years, falling below 11% of total supply for the first time since March 2018.
This trend, revealed in new Glassnode data, points to a rising preference for long-term holding and institutional custody.
HODLers Show Long-Term Conviction
The decline from a 17.2% peak in March 2020 suggests a shift in investor behavior.
Over 1.26 million BTC, or about 6% of the total supply, has moved away from exchanges during that time.
According to CryptoQuant, the Exchange Flows to Network Activity Ratio has reached its lowest level since early 2023.
This indicates that even as Bitcoin prices climb, fewer coins are being deposited on trading platforms.
The current 30-day moving average of the ratio sits at around 1.2—well below its 365-day average and nearing -1 standard deviation.
Such levels often signal strong holding sentiment and a reduced willingness to sell.
Rise of Institutional Custodians
Much of Bitcoin’s migration away from exchanges is being driven by institutional players favoring third-party custody over public platforms.
Firms like BlackRock, Fidelity, and Franklin Templeton are now using platforms like Coinbase Prime, which reported $212 billion in assets under custody in Q1 2025.
Meanwhile, Coinbase’s exchange recorded over $500 million in BTC outflows during the same period, with another $761 million in withdrawals on June 5.
Spot Bitcoin ETFs are also absorbing large amounts of BTC.
As of June 5, ETF holdings had ballooned to $44.54 billion, up from just $1 billion at their launch in January 2024.
Trust in Exchanges Falters Post-FTX
The collapse of FTX in late 2022 appears to have triggered a long-lasting erosion of trust in centralized exchanges.
Glassnode data shows consistent outflows from November 2022 to May 2023, including several weeks with more than 10,000 BTC withdrawn.
In total, more than 200,000 BTC left exchanges during that six-month stretch.
This indicates a lasting shift toward self-custody and alternative trading platforms.
A 2025 joint survey by Coinbase and EY-Parthenon found that 83% of institutional investors plan to increase their crypto exposure, with nearly 60% allocating over 5% of assets under management to digital assets.
Standard Chartered estimates that 61 public companies already control more than 3% of the total 21 million BTC supply.
With growing confidence in self-custody and institutional infrastructure, exchange balances may continue to decline—even as Bitcoin aims for new highs.
