The self-custody fever of investors has started depleting bitcoin reserves in many crypto exchanges except a few at the top as investors are taking bitcoin into self-custody, shaken by the FTX collapse and its aftermath.
The bankrupt exchange FTX first halted client withdrawals and then moved to file bankruptcy suit.
Barring two exchanges with the largest bitcoin balances – Coinbase (529,000) and Binance (479,000) with modest declines over the past week, other exchanges faced significant declines.
Over 220,000 BTC Withdrawn
According to data from Coinglass, roughly 26,000 more bitcoin (BTC) have been pulled out of crypto exchanges over the past 24 hours as of November 18, with the total withdrawal since November 7 zooming to more than 220,000 bitcoin.
The 1.87 million bitcoin now left on exchanges, as tracked by Coinglass is the lowest level in the last year, down from 2.11 million on November 7. Kraken faced heavy bitcoin exit with a notable decline over the past week and at press time it was down 27% from the previous week.
Gemini BTC Holdings Dip 12.5% in a Day
Gemini exchange paused withdrawals from its Earn program following its exposure with Genesis crypto lending unit that had already stopped withdrawals. According to Coinglass data, the bitcoin balance at Gemini now stands at 165,000 coins, down 12.5% from roughly 188,500, a day before.
Meanwhile, some experts cautioned that self-custody is not risk-free. They also warned about the risks involved when holding digital assets in your own custody.
Ethereum co-founder Vitalik Buterin tweeted that bugs in smart contract code can pose risks. To mitigate risks, Buterin suggested keeping code simple, audits, verification plus in depth defense.
