Bitcoin and Ethereum outflows at Kraken reach all-time highs

Recent data indicates that Kraken, a cryptocurrency exchange, saw its largest outflows of Bitcoin (BTC) and Ethereum (ETH) since 2017.

At the same time, this shift in digital asset holdings raises questions about the current state of the stock market and the broader dynamics of the cryptocurrency market.

According to information from Joao Wedson, founder and CEO of Dominando Cripto, Kraken’s Bitcoin reserves have fallen to levels not seen since 2018, now holding around 122,300 BTC. In the same way, Ethereum reserves fell below one million units, a figure last seen in early 2016. Wedson shared these findings on CryptoQuant, a blockchain analysis platform.

Wedson noted:

“The Kraken’s #Bitcoin reserves have fallen to the same level as in 2018, now holding 122,300 BTC. For #Ethereum, this is the first time that Kraken reserves have fallen below one million units, a level not seen since early 2016.”

The scale of these withdrawals is considerable. The exchange saw an outflow of 49,100 BTC, valued at approximately $3.33 billion, and 572,100 ETH, valued at approximately $2.15 billion. These significant moves suggest a strategic repositioning of reserves by Kraken or possible institutional activity.

Impact of Cash ETF Approvals

The recent spot approval Bitcoin and Ethereum Securities and Exchange Commission (SEC) ETFs influenced these outflows. The increased interest in these ETFs has led to a shortage of supply on exchanges, including Kraken. Since the approval, approximately 777,000 ETH, valued at approximately $3 billion, has been withdrawn from various exchanges.

Anticipation of the spot Ethereum ETF trade has contributed to capital outflows, even if they have not yet started. Investors are likely withdrawing their assets from exchanges in anticipation of ETF-related strategies, impacting overall liquidity.

Market reactions and price trends

Current market conditions reflect these significant drawdowns. Bitcoin was trading at $68,974 at press time, showing an increase of 0.15% over the past 24 hours. Conversely, Ethereum was trading at $3,771, down slightly by 1.07%, according to CoinMarketCap.

BTC vs. ETH/USD 1-day price chart (Source: CoinMarketCap)

Market analysts are closely monitoring these developments. Capital outflows and potential supply shock could lead to higher prices in the coming months. This scenario is reinforced by the derivatives market’s improving open interest, which supports a bullish outlook for Bitcoin.

Thomas Fahrer, co-founder of Apollo, predicted that the price of Bitcoin could reach $3.5 million per coin by 2030. While this projection is speculative, it highlights the potential for significant growth in the cryptocurrency market .

Institutional and self-custody trends

The abandonment of stock exchanges as the main holders of crypto assets becomes more and more apparent. Address checks suggest that Kraken’s asset movements were “synchronized and rapid,” involving decisions rather than random withdrawals. This is part of a broader trend where major players are opting for greater self-custody amid growing institutional involvement.

Market analyst Ali highlighted: “Since #Ethereum spot ETFs were approved by @SECGov, approximately $777,000 ETH – valued at approximately $3 billion – has been withdrawn from #crypto exchanges!

This trend indicates investors’ preference for long-term holding behaviors, which reduce selling pressure and potentially stabilize the market. The move toward self-custody reflects a cautious approach by investors, who seek to protect their assets in a fluctuating market environment.

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