The amount of Bitcoin held on centralized exchanges has fallen dramatically over the past year, with more than 400,000 BTC leaving trading platforms since December 2024, according to new data from analytics firm Santiment. The shift represents roughly 2% of Bitcoin’s total circulating supply and is being viewed by analysts as a constructive trend for market stability.
Santiment’s latest on-chain data shows that the supply of Bitcoin on exchanges continues to thin as the asset trades near the $90,000 level. Historically, a reduced exchange balance has been associated with lower immediate selling pressure, since coins held in private or institutional custody tend to be less liquid and less likely to be deployed for short-term trading, according to Cointelegraph.
“A consistent decline in exchange balances has often preceded periods of price strength,” Santiment noted, adding that the current drawdown further reinforces Bitcoin’s long-term investment narrative.
ETFs and Institutions Quietly Absorb Supply
While many of the outflows have flowed into personal cold-storage wallets, a growing share appears to be heading to institutional products. Giannis Andreou, founder and CEO of Bitmern Mining, highlighted that exchange-traded funds and publicly listed companies now collectively hold more Bitcoin than centralized exchanges themselves, a notable milestone in the asset’s maturation.
Citing figures from BitcoinTreasuries.Net, Andreou described the shift as a turning point:
“Institutional ownership has entered a new phase. We’re seeing a market shaped increasingly by regulated investment vehicles rather than traditional trading platforms. This means less liquid supply, more long-term holders, and stronger price reflexivity.”
Analysts say this structural change could amplify future supply-demand imbalances, particularly as ETF inflows accelerate and new investors seek exposure through regulated products rather than directly from exchanges.
A Market Leaning Toward Scarcity
Data from CoinGlass supports the broader trend, showing exchange balances falling to roughly 2.11 million BTC as of late November, down significantly from about 1.8 million a year earlier. At the same time, ETF trackers like BitBo estimate that spot Bitcoin ETFs now hold over 1.5 million BTC, while public companies collectively own more than one million.
Combined, these holdings represent close to 11% of all Bitcoin in existence, highlighting how quickly the asset has been migrating into longer-term, less liquid portfolios.
With supply on exchanges continuing to thin, market observers warn that any future surge in demand, whether driven by institutional flows, retail enthusiasm, or macroeconomic shifts, could compound Bitcoin’s already tightening supply conditions.
