Over $1.5B in Bitcoin has been withdrawn in one week from US crypto exchanges

Key points:

• Bitcoin has poured in from exchanges over the past week, as users worry about security and regulatory scrutiny.
• Data from the on-chain monitoring resource Coinglass shows a sharp decrease in BTC balances on U.S. exchanges in particular.
• A total of 134,000 BTC left their exchanges books this week — the equivalent of about $2.2 billion at current prices, about $1.5 billion of which came from U.S. platforms.
• Average long-term holders (LTH) — companies that have held coins for at least 155 days — dropped 33%.

U.S. Exchanges Lead Bitcoin Outflows

In the wake of the FTX scandal, social media stepped up efforts to draw attention to the risks involved in storing BTC.

Users appeared to heed the warning, withdrawing more than $3 billion in cryptocurrency and ordering record amounts from hardware wallets in the week following the solvency collapse.

Meanwhile, the fallout from FTX has only just begun, with investor anxiety continuing to grow as regulators plan investigations and pay more attention to the cryptocurrency as a whole.

The data shows that the trend of exchange withdrawal is still there. Over the past 7 days, net withdrawals have exceeded deposits on almost all major platforms.

The biggest weekly drop was on Gemini, down nearly 30,000 BTC, followed by Kraken, Binance, and Coinbase.

Unsurprisingly, withdrawals from US exchanges were particularly strong; a jurisdiction that will play a key role in the future FTX saga.

Lawmakers this week announced special hearings on what happened to the exchange, amid reports that its former chief executive, Sam Bankman-Fried, will be extradited from the Bahamas to the United States.

"The demise of FTX has caused massive losses to over a million users, many of them - ordinary people who poured their hard-earned life savings into cryptocurrency exchange FTX only to watch it all disappear in seconds", said Maxine Waters. Mainstream media quoted the chairman of the U.S. House of Representatives Financial Services Committee, who will preside over the hearing, as saying.

Meanwhile, data from Coinglass shows that even exchanges with no exposure to FTX exposure were unable to stem outflows.

A total of 134,000 BTC left their books this week — the equivalent of about $2.2 billion at current prices, about $1.5 billion of which came from U.S. platforms.

'Serious financial distress'

As reported, despite the surge in exchange withdrawals, the average BTC holder remains low — and thus less willing to sell.

This is corroborated by data from the on-chain analytics firm Glassnode. Average long-term holders (LTH) — companies that have held coins for at least 155 days — dropped 33%.

This is almost unprecedented, matching only the bottom of the bear market in 2018 when the average balance reached 36%.

The accompanying commentary described LTH as being in "serious financial distress".