Is Kraken In Trouble? Largest Bitcoin and Ethereum Outflow Spotted Since 2017

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As a researcher with extensive experience in the cryptocurrency market, I find the recent data from Kraken regarding the largest Bitcoin (BTC) and Ethereum (ETH) outflows since 2018 to be quite intriguing. According to reports, Kraken’s Bitcoin reserves have dropped to the same level as in 2018, holding only 122,300 BTC. Similarly, for Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.

Since 2021, Kraken, the cryptocurrency exchange, has experienced its most significant Bitcoin (BTC) and Ethereum (ETH) withdrawals on record.

Crypto Exchanges See Huge Drop in Bitcoin And Ethereum

As a blockchain analysis expert, I’d like to share with you an insightful observation from Joao Wedson, the CEO of Dominando Crypto. He recently posted on the magnitude of the current exchange supply crunch based on data from the blockchain analytics platform, CryptoQuant. According to him, there’s been a significant decrease in crypto reserves held by major exchanges, indicating a potential increase in demand and potentially higher prices.

Based on Wedson’s report, Kraken’s Bitcoin holdings have decreased to a level last seen in 2018, now amounting to approximately 122,300 Bitcoins. In contrast, the exchange’s Ethereum reserves have dipped below the one million unit mark for the first time since early 2016.

Kraken: Largest $BTC and $ETH Outflows Since 2017!
“Kraken’s #Bitcoin reserves have dropped to the same level as in 2018, now holding 122,300 BTC. For #Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.” – By…
— CryptoQuant.com (@cryptoquant_com) June 3, 2024

The surge in interest around Bitcoin and Ethereum spot exchange-traded funds (ETFs) has led Kraken to adopt this stance. In the past five months, cryptocurrency investors have experienced a remarkable growth spurt, driven largely by the introduction of these ETFs. Many crypto advocates have jumped on board for various reasons: expanding their investment diversification and capitalizing on perceived opportunities before they pass. This phenomenon is often referred to as FOMO or the Fear of Missing Out.

The surging interest in cryptocurrencies such as Bitcoin and Ethereum has put pressure on exchanges like Kraken, leading to concerns over diminishing crypto reserves. The recent approval of the Ethereum ETF by the Securities and Exchange Commission (SEC) is only a week old, yet exchanges are already grappling with a shortage.

Starting on June 2, over 777,000 ETH, equivalent to roughly $3 billion, have been taken out of cryptocurrency exchanges. It’s important to mention that Ethereum spot ETF trading has not begun yet, but there is optimism that the S-1 registrations will be approved soon.

If we continue at this pace, the digital asset market may experience a supply shortage in the future, potentially leading to significant price increases.

Effect of Supply Shock on Bitcoin Price 

At present, Bitcoin is priced at $69,252.47, marking a 1.75% rise over the past 24 hours. On the other hand, Ethereum stands at $3,787.97, experiencing a 0.21% decrease during the same timeframe. The crypto market is showing signs of potential growth in the upcoming months, with this trend possibly influenced by various contributing factors beyond just supply shortages.

Analysts are convinced that the derivatives market’s open interest significantly enhances Bitcoin’s bullish perspective.

As an analyst, I’ve noticed that the market is forecasting a significant increase in Bitcoin’s price. However, Apollo’s co-founder, Thomas Fahrer, made an bold prediction suggesting that the price could hit $3.5 million per coin by 2030. It remains to be seen if this projection aligns with current market trends. Regardless, a sudden spike in Bitcoin’s value could also lead to a corresponding rise in the worth of other digital assets.

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2024-06-03 19:36