Crypto Exchanges Face Historic Liquidity Crunch Ahead of Bitcoin Halving

Bitcoin Exodus: Over $2 Billion in BTC Withdrawn from Exchanges in 90 Days

In the past 90 days, trading platforms have seen a significant decrease in the number of bitcoins available for trading. Approximately 60,000 bitcoins, valued at just over $2 billion, have been removed from these exchanges. Currently, the total number of bitcoins on centralized exchanges is slightly more than 2 million. This lack of liquidity has been highlighted in a recent report by Falconx, which states that swings in the market have been exacerbated by this persistent issue.

Sharp Decline in Bitcoin Holdings on Centralized 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. In less than a year, exchanges have experienced a reduction of 477,000 BTC. By July 31, 2023, the number of bitcoins held on these platforms had decreased to 2.096 million. This means that a significant amount of $2 billion in bitcoins, equivalent to 60,000 BTC, has been withdrawn from these platforms.

Decrease in Ethereum and Stablecoins on Exchanges

The decrease in cryptocurrency assets held on exchanges extends beyond bitcoins. The number of ethereum (ETH) held on centralized exchanges has also seen a significant decline. On November 5, 2022, there were 23.14 million ETH held on trading platforms. However, as of October 30, 2023, this number has dropped to 14.57 million, indicating that 8.57 million ethereum, worth $15.64 billion, have been removed from exchanges in less than a year. Additionally, stablecoins have also been taken off exchanges or redeemed by the central issuers. Exchanges that held $35 billion in stablecoin assets last November now only have $17.34 billion. This suggests that more than $17 billion in ERC20-based stablecoins have either been redeemed or withdrawn from these platforms.

Potential Impact on Cryptocurrency Market Volatility

The decrease in liquidity on crypto exchanges may be a contributing factor to the recent volatility in the cryptocurrency market. A report by Falconx, citing Coin Metrics data, reveals that the depth of the crypto market in 2023 has reached its lowest point. As the Bitcoin halving event approaches, these liquidity cycles may become even more pronounced. It remains to be seen how this liquidity crunch will affect the overall stability and performance of the cryptocurrency market.

What are your thoughts on the decreasing amount of crypto assets held on exchanges over the past 90 days and year? Feel free to share your opinions and insights in the comments section below.

Frequently Asked Questions

Are precious metals allowed in an IRA?

The answer to that question will depend on whether the IRA owner plans to diversify his holdings to gold and/or keep them safekeeping.

If he does want to diversify, then there are two options available to him. He could purchase physical bars of gold or silver from a dealer and then sell these items to him at the end. Imagine he doesn't desire to sell off his precious metals investments. He should keep them, as they are perfectly safe to be stored in an IRA account.

What is a Precious Metal IRA?

Precious metals can be a good investment for retirement accounts. They have been around for centuries and are still very valuable today. A great way to diversify and protect your portfolio is to invest in precious metals such silver, gold, and platinum.

Certain countries permit citizens to hold their money in foreign currencies. You can buy gold bars in Canada, and then keep them at the home. Then, when you travel to Canada, you can make the same gold bars and sell them for Canadian Dollars.

This is a quick and easy way of investing in precious metals. It's particularly helpful for people who don't reside in North America.

What is the most valuable precious metal?

The investment of gold is high-returning and has high capital appreciation. It protects against inflation, as well as other risks. As inflation worries increase, gold prices tend to rise.

It's a good idea to purchase gold futures. These contracts will guarantee that you will receive a specific amount of gold at an agreed price.

But, not everyone is able to afford gold futures. Some people prefer physical gold.

They can easily exchange their gold with other people. They can also easily sell it whenever they like.

Some people would rather not pay tax on their gold. To avoid paying taxes on their gold, they purchase it directly from the government.

This requires that you make multiple trips to the local post office. You will first need to convert any existing gold in coins or bars.

Finally, you'll need to get a stamp to put on the bars or coins. Finally, you send them to the US Mint. There, they melt down the coins and bars into new ones.

These new bars and coins have the original stamps stamped on them. They are therefore legal tender.

If you buy gold from the US Mint directly, you won’t have to pay tax.

What precious metal would your investment preference be?

Can I place gold in my IRA account?

The answer is yes It is possible to add gold to your retirement plans. Because it doesn't lose any value over time, gold is a great investment. It also protects against inflation. It also protects against inflation.

Before you decide to invest in gold, it is important to understand that it isn't like other investments. Unlike stocks or bonds, you can't buy shares of gold companies. They can't be sold.

Instead, convert your gold to money. This means that you must get rid of your gold. You can't just hold onto it.

This makes gold different than other investments. With other investments, you can always sell them later. But that's not the case with gold.

Even worse, you can't use the gold as collateral for loans. If you get a mortgage, for example, you might have to give up some of the gold you own in order to pay off the loan.

What does that mean? Your gold can't be kept forever. You'll have to turn it into cash at some point.

There's no need to be concerned about this right now. All you have to do is open an IRA account. After that, you can start investing in gold.

Which type of IRA can be used to store precious metals?

Many financial institutions and employers offer an individual retirement account (IRA) as an investment option. Through an IRA, you may contribute money to an account that grows tax-deferred until withdrawn.

You can save taxes and pay them later with an IRA. This allows you to save more money today and pay less taxes tomorrow.

An IRA has the advantage of allowing contributions and earnings to grow tax-free until you withdraw your funds. Early withdrawals are subject to penalties.

After 50 you can still make contributions to your IRA. There is no penalty. You'll owe income tax and a 10% federal penalty if you withdraw from your IRA in retirement.

Withdrawals made before age 59 1/2 are subject to a 5% IRS penalty. Withdrawals between ages 59 1/2 and 70 1/2 are subject to a 3.4% IRS penalty.

The IRS will penalize withdrawals of more than $10,000 annually.

Are precious metal IRAs a good investment?

Answers will depend on the amount of risk you are willing and able to take in order for your IRA account to lose value. If you have $10,000 cash, they make sense as long as you don’t expect your IRA account to grow rapidly. These are not the best investments if there is a long-term plan for saving money (like gold) or if you want to invest more in assets that will rise in value over time. These fees can reduce any gains.

Can a gold IRA make you money?

Yes, it is possible. But not as many as you might think. It all depends on how risky you are willing to take. A $10,000 investment per year for 20 years could lead to $1 million by retirement age. However, if all your eggs are in one basket, then you will lose everything.

Diversify your investments. Inflation is a problem for gold. You want to make investments in an asset class that rises with inflation. Stocks perform this well because they rise whenever companies increase their profits. Bonds also do this well. They pay interest each year. So they're great during times of economic growth.

But what happens when there isn't any inflation? When there is no inflation, stocks and bonds will lose even more value. Investors should not put all of their savings in one investment such as a stock mutual fund or bond.

They should instead invest in a combination of different types of funds. They could, for example, invest in stocks and bonds. Or they could invest in both cash and bonds.

So they can see both sides of each coin. Inflation and deflation. And they will still see a return over time.


  • SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (
  • Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (
  • Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (

External Links

How To

How to Start Buying Silver with Your IRA

How to get started buying silver with your IRA – Owning physical bullion directly is the best way for you to invest in silver and gold. The most popular investment form is silver bars and coins. This is because it offers diversification and liquidity.

There are many options available if you wish to purchase precious metals such as gold and silver. You can purchase them directly from their producers, such as mining companies and refiners. You can buy them directly from the producer or a dealer who purchases and sells bullion.

This article will help you to start investing silver with your IRA.

  1. Investing In Gold & Silver Directly – This is the best option to buy precious metals. This means that you can get the bullion straight from the source, and it will be delivered directly to your front door. Some investors decide to keep their bullion at their home while others prefer to store it in an insured storage facility. When you hold onto your precious metal, ensure you're storing it properly. Many storage facilities offer insurance against fire, theft and damage. But even with insurance, you risk losing your investments due to natural disasters or human error. This is why it is a good idea for precious metals to be stored in a safe deposit container at a bank/credit union.
  2. Online Precious Metals Shopping – Bullion online can be a great alternative to carrying around heavy boxes. Bullion dealers offer bullion in a variety of forms, including bars and coins. You can find coins in many sizes, shapes, or designs. Coins are generally lighter than bars and easier to transport. Bars come with a range of weights and sizes. Some bars weigh hundreds of pounds, while others only weigh a few ounces. When choosing which bar to buy, it is important to consider what you will use it for. A smaller size bar might work well if you are giving it away as a present. However, if it's something you intend to use as a gift, it might be a smaller model. If you wish to add it to a collection and proudly display it, it may be worth spending fewer dollars.
  3. Buying Precious metal from Dealers-A third option is buying bullion through a dealer. Most dealers only specialize in one type of market, either silver or gold. Some dealers specialize only in bullion of certain types, such as rounds or minted coin. Others may specialize in specific areas. Others are specialists in bulk purchases. Regardless of which dealer you choose, you'll likely find that they offer competitive prices and convenient payment methods.
  4. Purchase Precious Metals via Retirement Accounts – Although this is technically not an investment, it can be used as a way to increase exposure to precious materials. A qualified retirement account is required to invest in precious metals in order to qualify for Section 219 IRS Code tax benefits. These accounts include IRAs. These accounts are designed to help you save for retirement and often provide higher returns than other investment vehicles. You can also diversify your holdings by opening these accounts. But what's the downside? The drawback? These accounts can only be opened by employees who are sponsored by their employers.


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