Massive Outflow of Bitcoin from Centralized Exchanges
On Wednesday, over 17,000 BTC, valued at more than $1.6 billion at the current market rate of $98,600, were withdrawn from centralized exchanges. This data, sourced from Glassnode and shared by Andrew Dragosch, the Head of Research at Bitwise, indicates the largest single-day outflow since April 2024.
Dragosch noted that the massive outflow suggests that “whales” – large institutional investors – are taking advantage of the current market dip. These investors typically prefer to hold onto their Bitcoin for the long term by taking direct custody of their assets, which is why significant exchange outflows often signal bullish sentiment.
Coinbase split 4 addresses totaling 20,949 BTC, into 60 Addresses: 20 x 245 BTC and 40 x 401 BTC
— Sani | TimechainIndex.com (@SaniExp) February 5, 2025
looks like something is cooking, possible major purchases this week by ETFs or MSTR https://t.co/br8iMlnyaD
While blockchain data is commonly used to assess market trends, it’s important to remember that it can be affected by internal wallet transfers conducted by exchanges. These factors can sometimes skew the interpretation of the outflow data.
Coinbase’s Major Role in Bitcoin Withdrawals
Coinbase was a key player in the recent outflow, processing net withdrawals of over 15,000 BTC. Timechainindex.com’s analysis revealed that Coinbase moved more than 20,000 BTC across four addresses, which were then split into 60 different addresses. This action may indicate that large institutional investors, such as ETFs or MicroStrategy, are preparing for major Bitcoin purchases in the coming days. Glassnode has confirmed that a significant portion of these Bitcoin transactions is likely being stored in a cold wallet, adding credibility to the theory that institutional investors are accumulating Bitcoin in preparation for future long-term investments.
On-chain data from CryptoQuant shows that Wednesday’s Bitcoin outflow was not limited to Coinbase. All crypto exchanges combined experienced a cumulative negative netflow of 47,000 BTC. Of this total, 15,800 BTC was attributed specifically to Coinbase.
Amid the outflow, Bitcoin’s price fell below $96,800 late on Wednesday during U.S. trading hours but reversed direction early today. This recovery was partially influenced by news that Eric Trump, son of former President Donald Trump, encouraged the family-linked platform, World Liberty Financial, to make its first Bitcoin investment.
What’s Next for Bitcoin?
The massive outflow of Bitcoin from centralized exchanges, especially Coinbase, combined with bullish institutional activity, is likely to have long-term implications for Bitcoin’s price. As more institutional players invest, and with the growing interest from high-profile figures, the future of Bitcoin remains optimistic, with potential price recovery on the horizon.
