Why is the percentage of bitcoin percentage in crypto exchanges near 7-year lows?

Key takeaways:

• The percentage of Bitcoin’s supply to the exchanges has dropped below 11% on the first time since 2018.

• The adoption of the institution facilitates the removal of BTC from public exchanges.

• Trust in centralized platforms is trembling post-FETX.

Bitcoin’s (Btc) percentage of supply in exchanges falls near seven years lows, falling under 11% for the first time since March 2018, according to Glassnode data.

The peak occurred in March 2020, more than 17.2% of BTC supply was held in exchanges. Since then, more than 6% of the total supply, or approximately 1.26 million BTC, has been withdrawn from exchange wallets.

Let us examine the main reasons behind the growing removal of Bitcoin from crypto exchanges.

Bitcoin’s hodling rises to a two -year high

Bitcoin investors hold their coins at the highest level over two years, according to the latest exchange flow to the network activity ratio chart Cryptoquant.

The ratio, which measures the amount of BTC flowing through the exchanges associated with the onchain network activity, has fallen into its lowest reading since early 2023, the signing of the exchanging deposits despite the rising prices.

In early June 2025, the 30-day transfer of the average ratio sat near 1.2, which is less than the 365-day average and approaching -1 standard deviation.

History, low levels are marked with periods of strong faith in the middle Long -term Bitcoin holdersIncludes investors prefer cold trading storage.

Related: Bitcoin’s eyes $ 115k by July, but strong US job data to threaten the rally: Analysts

It reduces the available supply, with fewer coins that will be potentially sold even when Bitcoin is close to all times high.

Institutional custodians exchanging crypto exchanges

The Increasing institutional care solutions is another major factor behind the reduction of bitcoin supply to exchanges.

Instead of public exchanges, large financial institutions such as Blackrock, Fidelity, and Franklin Templeton prefer third-party precautions.

Coinbase Prime, for example, reported More than $ 212 billion in possessions under Q1 2025, urged “flows from ETF providers, corporations, and high net individuals.”

The Coinbase Crypto Exchange, on the other hand, witnessed more than $ 500 million worth of BTC outflows in the same quarter.

The flows continued in the second quarter, with the 761 million worth of backward witnessed on June 5.

ETFs attract a large portion of these bitcoins to their coffers.

The net worth of properties managed throughout the Bitcoin ETFS area is $ 44.54 billion to June 5, from nearly $ 1 billion in their launch in January last year.

Supporting this trend, a 2025 survey Through Coinbase and Ey-Parthenon found that 83% of institutional investors plan to increase their crypto exposure, with nearly 60% allocating more than 5% of their AUM in digital properties.

About 61 public companies Already controlled More than 3% of the total Bitcoin supply of 21 million tokens, according to the standard chartered.

Trust in exchanges reduces post-ftx collapse

Following FTX collapse in late 2022Bitcoin has experienced a dramatic shift in exchange flows, as seen in Glassnode chart.

The net moving volume (red bar) shows the ongoing flow until mid 2023, marked one of the biggest departure periods in Bitcoin history.

From November 2022 to May 2023, the weekly flow was repeatedly exceeded 10,000 BTC, reaching more than 200,000 BTCs withdrawing from centralized exchanges.

This indicates that trust in crypto exchanges has refused since the fall of the FTX, which facilitates the removal of bitcoin to self-custody and alternative platforms for trading.

This article does not contain investment advice or recommendations. Every transfer of investment and trading involves risk, and readers should conduct their own research when deciding.