The Glassnode chain analysis company has revealed how a popular myth surrounding the decline in supply in exchange for Bitcoin is not real.
Bitcoin supply available has not lost much
In his latest weekly report, Glassnode discussed a false idea which is widely maintained in the Bitcoin community around the decline in the balance of exchanges during this cycle.
The “balance of exchanges” here refers to a chain indicator which, as its name suggests, measures the total quantity of the cryptocurrency which is in the wallets of all centralized exchanges.
Generally, one of the main reasons why investors deposit for scholarships is for purposes linked to sale, so that the balance on exchanges is often considered as the available sales offer of the assets. Metric increases are therefore considered to be lower for the price of the BTC, because they suggest that more holders are ready to separate from their tokens. Likewise, the decreases can be supposed to be upwards.
Now here is the table of Bitcoin balance on exchanges shared by the analysis company in the report:
The value of the metric appears to have seen a plunge in recent months | Source: Glassnode's The Week Onchain - Week 4, 2025
As displayed in the above graph, the Bitcoin balance on exchanges was located at 3.1 million BTC in July 2024, but today it decreased to only 2.74 million BTC. This is a significant decrease and has made believe that many represents the creation of a “supply shock” for the assets.
Glassnode thinks the opposite, however, as the analysis company explained:
While many interpret this as a form of supply shock caused by a mass of parts of parts withdrawn by individual investors – potentially creating upward price pressure – we think that the majority of this decline comes from coins In the ETF wallets managed by guards like Coinbase.
Stock market negotiated funds (ETF) are investment vehicles that were introduced in the United States at the start of last year. They offer another way to obtain an exposure to the assets, in a mode familiar to traditional investors. This mode of investment in BTC has quickly gained popularity and today, the ETF Spot control a notable quantity of the offer.
“After the SEC approved the FNB Bitcoin Spot in January 2024, eight of the eleven ETF Spot selected Coinbase as a goalkeeper,” notes Glassnode. “While the demand for products ETF resumed, a significant migration of coins of exchange portfolios in the institutional portfolios of Coinbase occurred.”
You will find below the graph shared by the analytical company which shows the trend in the assets of these ETF Spot.
Looks like the ETFs combined hold 1.69 million BTC at the moment | Source: Glassnode's The Week Onchain - Week 4, 2025
An interesting image appears if the Bitcoin operations of the ETF spots are included with those of the exchanges.
How the combined balance on exchanges and ETFs has changed over the past few years | Source: Glassnode's The Week Onchain - Week 4, 2025
According to the graph, it is obvious that this combined indicator is seated at a value of 3.04 million BTC at the moment. This is almost the same level as the place where the market was at the beginning of 2024, just before the introduction of the ETF Spot.
On this basis, the analytical company concluded that the apparent drop in the balance of Bitcoin on exchanges is more likely to represent a change in market structure, rather than a decrease in the available sales offer.
BTC price
Bitcoin succeeded about 3% in the last day, which exceeded its price beyond $ 105,000.
The price of the coin seems to have retraced its recent plunge | Source: BTCUSDT on TradingView
Dall-E star image, Glassnode.com, tradingView.com graphic
