Bitcoin Suffers Sharp Descent Following DoJ Announcement
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Following the US Department of Justice’s announcement that it would be taking significant international cryptocurrency enforcement action, Bitcoin (BTC) suffered a sharp 5% drop within an hour.
The price of the most popular cryptocurrency in the world decreased from a daily high of $21,647 to roughly $20,413 on Wednesday, putting a halt to a trend in which it had increased by over a third since the year’s beginning.
Bitcoin Held on Exchanges at Record Lows
In other related news, investors have been withdrawing their cryptocurrencies from exchanges at a faster rate over the past several months. The amount of Bitcoin held on exchanges has been steadily declining since the bear market started in 2022. As a result, the percentage of BTC supply still available on centralized exchanges has dropped by one of the greatest margins on record.
According to a recent analysis by on-chain data provider Santiment, the amount of Bitcoin held by exchanges has experienced one of the biggest drops ever. Around 11.85% of the total supply of BTC was kept on exchanges in January 2022, but today, a year later, there is just 6.65% of the total supply still on exchanges.
This is due to the growing skepticism of centralized exchanges as a result of the collapse of FTX, one of the biggest cryptocurrency exchanges before its collapse. When the exchange declared bankruptcy, self-custody became more prominent, and more supply left exchanges than usual.
Withdrawals have historically affected some exchanges more than others. This mostly depends on how much mistrust there is toward centralized exchanges. For example, Kraken had 59% of all BTC held leave its coffers within a single year.
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