BTC Leaving Exchanges
The Daily Crypto Update for Institutional Investors'
The proportion of BTC’s supply held on exchanges has reached its lowest point since February 2018 - In this AM’s note, we discuss the distribution of BTC among holders
Individual investors, ~70% of the total supply: Various sources place the proportion of BTC held by individual investors at ~70% of the token’s supply. Among this group are the die-hard HODLers, investors with immense optimism on the asset’s long-term outlook who are highly insensitive to local volatility. Blockchain data indicates that 52.69% of BTC’s supply has not been moved for two years or more.
Exchanges, 12.82% of the BTC supply: The proportion of BTC’s supply held on exchanges reached a record high of 17.79% in the wake of the March 2020 sell-off. The metric subsequently receded as the 2020-2021 bull market gathered pace. The metric once again topped 17% as crypto contagion peaked in the latter half off 2022. Since June 2022, ~825,032 BTC has left exchanges. This departure of tokens from exchanges corresponds to previous patterns, where investors pull BTC off exchanges into burgeoning bull markets. However, the ongoing departure of BTC from exchanges is being accelerated by numerous factors, including demand from ETFs and corporate holdings, but also increased uptake of the ‘not yours keys, not your BTC’ mantra following the collapse of FTX. The shift of BTC supply away from exchanges, the largest, earliest and most established businesses in the crypto ecosystem, also underscores the evolution of the asset and its uptake by a broader investor base.
US ETFs, 5.76% of the BTC supply: Spot BTC ETFs have been described as the most successful ETFs of all time. Having debuted in January 2024, spot the ETFs revealed immense demand for BTC from a new cohort of investors. ETF holders have also proven undeterred by BTC’s volatility. Following weeks of volatility leading up to March, Bloomberg's ETF specialist Eric Balchunas noted that more than 95% of invested cash in the BTC ETFs ‘has held strong despite a painful 25% decline.’
Publicly listed companies, 3.76% of the BTC supply: Since its first acquisition of BTC in August 2020, Strategy (NASDAQ: MSTR) has led the corporate adoption of the token. The recent establishment of Twenty One, a Tether, Bitfinex, Cantor Fitzgerald and SoftBank-led BTC acquisition vehicle has supported the view that corporate balance sheets will continue to be a major source of demand for the token. According to Bitcoin Treasuries, 94 public companies hold BTC. Strategy accounts for 72% of BTC held by corporations.
Governments, 2.63% of the BTC supply: The US holds the most BTC, 207,189 BTC followed by China’s 194,000 BTC, among sovereign nations. These holdings are the result of various law enforcement seizures. In March, President Trump signed an executive order to establish a ‘Bitcoin Strategic Reserve’ using the BTC currently held by the US government. Approximately 110,000 of the BTC that the US government holds is the result of seizures associated with the 2016 Bitfinex hack. In January, US prosecutors asked a court to approve the return of these tokens to Bitfinex.
CRYPTO HEADLINES
Bernstein analysts indicated BTC was poised for potential new highs due to increased corporate accumulation and ETF inflows creating a 'supply squeeze'. The research team highlighted Twenty One Capital, a venture by SoftBank, Tether, Bitfinex, and Cantor Fitzgerald, which plans to launch with 42,000 BTC, while US spot BTC ETFs saw USD 3B in net inflows last week. - link - @TheBlock
ProShares is set to launch three XRP futures-based ETFs this week following approval from the SEC. These include an Ultra XRP ETF, a Short XRP ETF, and an Ultra Short XRP ETF, following the CME’s recently announced cash-settle XRP futures. - link - @CoinDesk
Coinbase Asset Management will launch the Coinbase Bitcoin Yield Fund on May 1, targeting an annualized net return of 4% to 8% in BTC for non-US institutional investors. The fund uses a cash-and-carry strategy, capitalizing on variances between BTC's price and perpetual swaps. Investors will deposit and withdraw BTC monthly. - link - @Bloomberg
Strategy (NASDAQ: MSTR) purchased 15,355 BTC for USD 1.42B, at an average price of USD 92,737 per coin. The company’s BTC holdings now total 553,555 coins which it purchased at an average cost of USD 68,459. - link - @MichaelSaylor
Semler Scientific (NASDAQ: SMLR) announced it purchased 111 BTC between February and April. The company now holds 3,303 BTC in its treasury, and transitioned from a USD 150M ATM offering to a new USD 500M agreement, issuing shares for further BTC acquisitions. - link - @SMLR
Nexo reentered the US market after a two-year regulatory exit following a USD 45M settlement over its Earn Interest Product. The crypto lender announced its return at a private event, planning to offer crypto savings accounts and loans. Nexo left the US in 2022. - link - @TheBlock
Stripe plans to pilot a new stablecoin payments product for companies outside the US, UK, and EU. CEO Patrick Collison stated the plan was nearly a decade old. In October, Stripe acquired stablecoin infrastructure firm Bridge for USD 1.1B. - link - @PatrickCollison
DeFi Development Corp. (NASDAQ: JNVR) announced plans for an offering of up to USD 1B to acquire more SOL. In an SEC filing, the firm said it plans to sell equity and or debt instruments to fund purchases for its treasury, which has acquired USD ~48M of SOL to-date. - link - @JNVR
The Swiss National Bank rejected holding BTC reserves due to concerns about market liquidity and volatility. SNB President Martin Schlegel stated that cryptocurrencies do not meet the bank's requirements for currency reserves. The Bitcoin Initiative highlighted that a 1% BTC allocation could have increased returns with minimal volatility. - link - @CoinDesk
Z Squared, a DOGE mining firm, announced a merger with biotech firm Coeptis (NASDAQ: COEP). This merger aims to continue DOGE mining and spin out Coeptis' business separately. The company will operate 9,000 DOGE machines in the US, with the deal expected to close in Q3 2025. Shares of COEP fell ~40% on the news. - link - @CoinDesk
TOP ARTICLES
South China Morning Post: Hong Kong Ranks As Second-Most Crypto-Friendly City, Ahead Of Singapore, Abu Dhabi: Report
OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
US Exceptionalism is Dead, Long Live US Exceptionalism, London Crypto Club, April 27, 2025
The London Crypto Club reviews ongoing macro dynamics and their impact on BTC.
CRYPTO MULTIMEDIA
Twenty One Aims To Buy As Much Bitcoin As Possible. Can It Succeed? Unchained, April 25, 2025
Matthew Sigel, head of digital assets research at VanEck, discusses the new BTC acquisition vehicle, Twenty One.
CHART(S) OF THE DAY
Apart from its initial foray into BTC acquisition, Strategy's market cap to the NAV of its BTC holdings reached a multiple of 3.31 in November 2024.
About FRNT Financial
FRNT: TSXV is an institutional capital markets and advisory platform focused on digital assets. FRNT aims to bridge the worlds of traditional and web-based finance. Business lines include deliverable trading services, structured derivative products, merchant banking, advisory, consulting and principal investments.