$ 2.3 billion bitcoin withdrawn from exchanges dwarfs the amount of newly mined BTC

From October 15 through November 15, Bitcoin (BTC) withdrawals from exchanges fell from 2.5 billion to 2.355 million, the lowest since August 2018. Approximately 145,000 BTC, valued at $ 2,350 million at a price of $ 16,200, left the exchanges.

The Bitcoin exchange reserves since January 2018. Source: CryptoQuant

During the same period, Bitcoin miners mined around 27,000 BTC, which is roughly $ 437.4 million. Since miners mine 900 BTC every day after the halving on May 11th, 900 BTC equals 27,000 BTC for 30 days.

This aggressive accumulation trend in the Bitcoin market shows it Investors expect a sustained upward trend after the half.

Why the decline in Bitcoin stocks is bullish

$ 2.3 billion bitcoin withdrawn from exchanges dwarfs the amount of newly mined BTC
$ 2.3 billion bitcoin withdrawn from exchanges dwarfs the amount of newly mined BTC

The rewards per block are halved every four years until the fixed Bitcoin supply of 21 million is reached.

After each halving, the number of Bitcoin that can be mined per day is halved. This means that around 1,800 BTC were mined before the halving in May 2020. Until the next halving in 2024, 900 BTC will be mined per day.

The amount of Bitcoin available on exchanges is significantly reduced as less BTC is mined per day along with the increase in withdrawals from exchanges.

If the demand for Bitcoin continued to rise, the decline in supply would cause the value of BTC to increase. So, Many investors could expect the BTC price to see a sustained upward trend in the medium term.

Bitcoin hash rate recovers after a great difficulty

The increasing hash rate of the Bitcoin blockchain is another potential catalyst for BTC in 2021.

According to the data from Blockchain.com, Bitcoin’s blockchain hash rate has bounced back in the last few weeks after the biggest adjustment to the downside difficulties since 2011.

The 7-day bitcoin hash median rate increased from 106 million terahashes per second (TH / s) to 126 million TH / s between November 3rd and 15th.

Average 7-day bitcoin hash rate. Source: Blockchain.com

It is an optimistic trend that the bitcoin hash rate is recovering so quickly after the rainy season because it suggests it Miners are likely to expect the BTC price to rise in the medium term.

The data suggest that the institutes continue to accumulate

On November 14 Grayscale revealed Net assets under management (AUM) reached $ 9.8 billion. The company is only $ 200 million away from an AUM of $ 10 billion.

The AUM of grayscale is a decent metric for measuring institutional activity. The Grayscale Bitcoin Trust has become an investment vehicle for institutions that want to expose themselves to BTC.

Other platforms tailored for institutes like CME’s Bitcoin futures exchange are approaching record volumes and open interest..

The combination of increasing capital inflows on institutional platforms and decreasing supply of Bitcoin on exchanges suggests this Demand for BTC is likely to increase as the price nears its all-time high.

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