Bitcoin’s exchange withdrawals have climbed to their highest sustained level since 2022, even as the asset trades near record highs.
While current outflows remain below the 2023 accumulation peak, the renewed withdrawal trend highlights a behavioral shift in how investors gain exposure to Bitcoin.
Institutional demand increasingly flows through spot exchange-traded funds (ETFs) rather than direct purchases, leaving retail holders as the main force behind on-chain accumulation.
“This trend unfolds despite Bitcoin recently hitting a new all time high, indicating that investors are withdrawing coins from exchanges even as prices remain elevated. Such behavior typically reflects confidence in long term value and a decline in short term selling pressure, reinforcing the view that large holders continue to accumulate rather than distribute.”
Strong exchange outflows can coincide with bullish phases, as investors transfer their coins into cold storage to signal long-term conviction.
However, during the initial run-up in 2021, fewer holders withdrew to self-custody, leaving more liquidity on centralized exchanges. Once the first top was in, investors began sending coins to exchanges at record rates.
Net withdrawals didn’t reach the levels we see now until FTX collapsed two years later.
Last cycle saw a softer supply squeeze, which tends to limit near-term upside pressure even when demand remains strong.
This time, we have coins leaving exchanges at unprecedented levels when Bitcoin is in a price discovery phase.
The withdrawal pace highlights a significant behavioral shift for investors, who increasingly opt for ETF exposure over direct Bitcoin ownership. On the other hand, retail traders appear more willing to remove their assets from exchanges, perhaps even migrating them into ETFs.
“These purchase figures from the US Spot BTC ETFs are utterly insane, both yesterday and the 5 business day rate. These are truly eye watering numbers.”
These ETF vehicles now collectively hold more than 1.3 million BTC, functioning as the dominant channel for institutional accumulation.
In earlier bull cycles, comparable inflows would have gone onto exchanges for sale, cold storage, or DeFi protocols. Today, they are flowing into regulated, custodial products, somewhat reducing the scarcity effect that once intensified price surges.
Should outflows increase in pace further alongside strong ETF inflows, a supply squeeze could hit ‘god candle’ levels before the end of 2025. we
