Crypto Exchanges Face Liquidity Crunch Ahead of Bitcoin Halving

Crypto Exodus: Over $2 Billion in Bitcoins Pulled from Exchanges in 90 Days

In the past 90 days, approximately 60,000 bitcoins, valued at just over $2 billion, have been withdrawn from trading platforms. This has resulted in a significant decrease in the number of bitcoins held on centralized exchanges, which now stands at slightly more than 2 million. A recent report from Falconx highlights that swings in the market have been further intensified by a persistent lack of liquidity.

Reduction in Bitcoin Holdings on Exchanges

The count of bitcoins on centralized exchanges has reached a multi-year low, with only 36,000 BTC surpassing the 2 million mark. This is in stark contrast to the 2.513 million BTC that were held on trading platforms as of November 5, 2022.

Over the course of less than a year, exchanges have seen a reduction of 477,000 BTC. By July 31, 2023, the number of bitcoins held on these platforms had dropped to approximately 2.096 million. This means that, based on the current exchange rates, a significant sum of $2 billion in bitcoins, equivalent to 60,000 BTC, has been withdrawn from these platforms.

Decrease in Ethereum and Stablecoin Holdings

A similar trend can be observed in the number of ethereum (ETH) held on centralized exchanges. Data from reveals that on November 5, 2022, there were 23.14 million ETH held on trading platforms.

However, as of October 30, 2023, the count of ether has decreased to 14.57 million, indicating that 8.57 million ethereum, valued at $15.64 billion, have been withdrawn from exchanges in less than a year. Additionally, stablecoins have also experienced a decrease in holdings on exchanges, with exchanges that held $35 billion in stablecoin assets last November now only having $17.34 billion. This suggests that more than $17 billion in ERC20-based stablecoins have either been redeemed or removed.

Lack of Liquidity and Market Volatility

The lack of liquidity in the cryptocurrency market may be a contributing factor to the recent volatility. According to a Falconx report, citing Coin Metrics data, the depth of the crypto market in 2023 has reached its lowest point. As bitcoin's halving approaches, these liquidity cycles may become even more pronounced.

In conclusion, the significant decrease in the amount of crypto assets held on exchanges over the past 90 days and year points to a liquidity crunch in the market. This, in turn, has contributed to increased market volatility. It will be interesting to see how the market adapts to these changes and whether liquidity will improve in the future. Share your thoughts and opinions on this subject in the comments section below.

Frequently Asked Questions

Should You Get Gold?

Gold was once considered an investment safe haven during times of economic crisis. Today, many people are looking to precious metals like gold and avoiding traditional investments like bonds and stocks.

The gold price has been in an upward trend for the past few years, but it remains relatively low compared with other commodities like silver or oil.

Some experts believe that this could change very soon. They say that gold prices could rise dramatically with another global financial crisis.

They also noted that gold is growing in popularity because of its perceived value as well as potential return.

Here are some things to consider if you're considering investing in gold.

  • Consider whether you will actually need the money that you are saving for retirement. You can save money for retirement even if you don't invest in gold. However, when you retire at age 65, gold can provide additional protection.
  • Second, you need to be clear about what you are buying before you decide to buy gold. Each offers varying levels of flexibility and security.
  • Remember that gold is not as safe as a bank account. Your gold coins may be lost and you might never get them back.

You should do your research before buying gold. Make sure to protect any gold you already own.

How much is gold taxed under a Roth IRA

The tax on an investment account is based on its current value, not what you originally paid. All gains, even if you have invested $1,000 in a mutual funds stock, are subject to tax.

If you place the money in a traditional IRA, 401(k), or other retirement plan, there is no tax when you take it out. Only earnings from capital gains and dividends are subject to tax. These taxes do not apply to investments that have been held for more than one year.

The rules that govern these accounts differ from one state to the next. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. In Massachusetts, you can wait until April 1st. New York is open until 70 1/2. To avoid any penalties, plan your retirement savings and take your distributions as early as possible.

What is the Performance of Gold as an Investment?

The supply and demand for gold affect the price of gold. Interest rates can also affect the gold price.

Due to limited supplies, gold prices are subject to volatility. There is also a risk in owning gold, as you must store it somewhere.

Who is the owner of the gold in a gold IRA

The IRS considers any individual who holds gold “a form of income” that is subject to taxation.

To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.

Gold can be used to protect against inflation and price volatility. However, it is not a good idea to own gold if you don't intend to use it.

You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.

You should consult a financial planner or accountant to see what options are available to you.

Can I have physical gold in my IRA

Gold is money. Not just paper currency. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Today, investors use gold as part of a diversified portfolio because gold tends to do better during financial turmoil.

Many Americans today prefer to invest in precious metals, such as silver and gold, over stocks and bonds. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.

One reason is that gold historically performs better than other assets during financial panics. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. Gold was one asset that outperformed stocks in turbulent market conditions.

Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your stock portfolio can fall, but you will still own your shares. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.

Finally, gold is liquid. This means that, unlike most other investments, you can sell your gold anytime without worrying about finding another buyer. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to profit from short-term fluctuations on the gold market.


  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (
  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (
  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (

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Investing gold vs. stocks

It might seem risky to invest in gold as an investment vehicle these days. This is because many people believe that gold investment is no longer profitable. This belief comes from the fact most people see gold prices falling due to the global economy. They believe they would lose their money if they invested gold. In reality, though, gold investment can offer significant benefits. Let's take a look at some of the benefits.

One of the oldest currencies known to man is gold. It has been used for thousands of years. It was used by many people around the globe as a currency store. As a means of payment, South Africa and many other countries still rely on it.

It is important to determine the price per Gram that you will pay for gold when making a decision about whether or not to invest. The first thing you should do when considering buying gold bullion is to decide how much you will spend per gram. If you don’t know what the current market price is, you can always call a local jewelry store and ask them their opinion.

It's also important to note that, although gold prices are down in recent months, the costs of producing it have risen. So while the price of gold has declined, production costs haven't changed.

When deciding whether to buy gold, another thing to consider is how much gold you intend on buying. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. But, if your goal is to make long-term investments in gold, this might be worth considering. You can profit if you sell your gold at a higher price than you bought it.

We hope you have gained a better understanding about gold as an investment tool. We recommend you do your research before making any final decisions. Only then can informed decisions be made.


By: Jamie Redman
Title: Crypto Exchanges Face Liquidity Crunch Ahead of Bitcoin Halving
Sourced From:
Published Date: Mon, 30 Oct 2023 18:30:51 +0000

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