Amount of Self-Custody Bitcoin Difficult to Measure

As investors offload Bitcoin from exchanges amid ongoing FUD, it is difficult to measure how much Bitcoin is being sent to self-custody wallets.

According to Santiment, Bitcoin’s exchange supply has fallen to its lowest level since February 2018. This is due to the growing trend of self-custody, which is when investors store their Bitcoin in their own wallets rather than on an exchange.

The growing trend of self-custody has a number of implications for the cryptocurrency market. For one, it can lead to a decrease in the market capitalization of Bitcoin, as the coins are no longer being counted as part of the circulating supply.

Additionally, the stagnancy of coins in self-custody can have a negative impact on the utility of the Bitcoin network. However, as long as there is still a healthy amount of exchange activity, this negative impact should be mitigated.

While it is difficult to measure the exact amount of Bitcoin that is being sent to self-custody wallets, the trend is clear. As more investors take control of their own Bitcoin, it is likely that the market capitalization of Bitcoin will continue to shrink.

What does this mean for the future of Bitcoin?

The trend of self-custody is likely to continue in the future. As more investors become aware of the risks of storing their Bitcoin on exchanges, they will opt to store their coins in their own wallets.

This could lead to a decrease in the market capitalization of Bitcoin, but it could also lead to a more secure and decentralized network. Ultimately, the future of Bitcoin will depend on the balance between self-custody and exchange activity.

What can investors do?

If you are an investor who is considering storing your Bitcoin in self-custody, there are a few things you should keep in mind. First, you need to make sure that you have a secure wallet. There are a number of different wallets available, so you should do your research to find one that is right for you.

Second, you need to keep your seed phrase safe. This is a set of words that will allow you to access your Bitcoin if you lose your wallet. You should store your seed phrase in a safe place, and you should not share it with anyone.

Finally, you need to be aware of the risks of self-custody. If you lose your wallet or your seed phrase, you will lose your Bitcoin. You should also be aware of the potential for hacking attacks.

If you are comfortable with the risks, then self-custody can be a good way to store your Bitcoin, as long as you take steps to protect your Bitcoin.