11-17-2022 icon

Transaction outflow spikes to significant levels as Bitcoin holders move to self-Custody

By Lucy Adegbe
Bitcoin holders

Traders’ trust in centralized trading protocol seems to diminish as bitcoin withdrawals are being made into non-custodial wallets, almost creating historic highs.

Bitcoin holders have significantly transferred their digital coins into non-custodial wallet protocols as one of the global leading digital exchange companies, FTX, crashed last week.

Blockchain transaction activity is displaying a rapid boost in outflows being moved into non-custodial wallets, as noted by on-chain data source Glassnode.

On November 13, Glassnode uploaded a tweet stating that BTC withdrawals already peaked close to a breaking rate of 106,000 BTC monthly.

The data provider cited that these peak has only occurred on three other occasions -November 2020, April 2022 and June/July 2022. In addition, Glassnode mentioned that the recipient wallets increased to an estimated number of 90,000 on November 9th.

FTX crash has awakened an extremely different move in BTC traders’ attitude in all units of the digital space, Glassnode underlined.

Transaction withdrawals are often regarded as a bull signal of long-term holdings for BTC. Nonetheless, the recent outcomes seem to translate to a decrease in traders’ trust in centralized digital trading protocols.

Industry players now endorse the idea of non-custody, with many holding tight to the expression “not your keys, not your coin.”

On Sunday, Ethereum instructor Anthony Sassano mentioned that digital currency holders should beware of centralized protocol storage solutions except they are functionally exchanging significant quantities.

Glassnode also briefed that value-backed coins,  a significant portion of which de-pegged the previous week, have significantly been sent into centralized protocols. An estimated number of $1 billion stablecoins entered these protocols on November 10.