Bullet Points:
• Bitcoin’s supply on centralized crypto exchanges has dropped from 11.85% to 6.65% over the past year.
• The drop highlights the increasing interest in self custody among investors.
• FTX’s dramatic collapse has emphasized the importance of self-custody for users.
The past year has seen a dramatic decrease in the overall supply of Bitcoin on centralized crypto exchanges. According to the latest data compiled by crypto analytic company, Santiment, the figure has dropped from 11.85% to 6.65%. This historic drop indicates a growing trend of investors opting for self custody of their assets, rather than entrusting their hard-earned money to a third-party platform.
The fall of Sam Bankman-Fried’s $32 billion crypto empire, FTX, has highlighted the importance of self-custody for users. The exchange was forced to shutter its operations after a devastating hack that resulted in the loss of over $200 million worth of crypto assets. This event has since been a wake-up call for crypto investors, emphasizing the need for caution when selecting a custodian to store their assets.
The rise in self custody has also been attributed to the increasing number of crypto wallets available on the market. Many of these wallets are designed to make it easier for users to securely store their assets without having to rely on a third-party platform. For example, hardware wallets provide air-gapped security and enable users to store their crypto assets offline. This makes them much less vulnerable to hacks and other malicious attacks.
The trend of self custody is likely to continue in the coming years as more investors become aware of the risks associated with entrusting their money to a third-party platform. Crypto exchanges are becoming increasingly regulated, which will further increase the security of users’ funds. In addition, the growing number of wallets available on the market will make it easier for users to securely store their assets without having to rely on a third-party platform.
Overall, the decrease in Bitcoin’s supply on centralized crypto exchanges is indicative of a larger trend towards self custody. This trend is likely to continue in the coming years, as more investors become aware of the risks associated with entrusting their money to a third-party platform. The fall of Sam Bankman-Fried’s $32 billion crypto empire, FTX, has served as a wake-up call to crypto investors, emphasizing the importance of self-custody for users. As the industry continues to become more regulated, users can expect to see an increase in the security of their funds, as well as a greater variety of wallets available to securely store their assets.