Site icon Bitcoin Crypto News

FTX disaster pushes Bitcoin to self-custodial mode, ETH is converted to stablecoin

After the FTX crash, investors are moving large amounts of Bitcoin to their self-custody wallets and exiting Ethereum to invest in stablecoins.

Bitcoin retreats to self-custodial mode

The chart below shows the amount of liquid, illiquid and highly liquid Bitcoin since 2008.

Liquid and illiquid supply | Source: Glassnode

As of November 2022, the number of Bitcoins held in self-custodial wallets has almost reached 15 million. Out of the current circulating supply of 19,204,000, this shows that 78% of all Bitcoins are held in self-custodial mode.

The chart below records the illiquid Bitcoin supply in more detail since the start of the year and shows a strong increase this week.

Supply is illiquid | Source: Glassnode

This strong upward move could be a result of the valuable lessons the community has learned from recent events regarding the FTX liquidity crisis. While FTX has committed to doing everything it can to provide liquidity, it has yet to deliver on any of its promises.

Stablecoins on Ethereum

The chart below collects the supply of the top 4 stablecoins – USDT, USDC, BUSD, and DAI – across different blockchains and compares them to the market capitalization of ETH.

Source: Glassnode

Observing the data, stablecoin dominance is higher than ETH as of 11/11. This has only happened once before in crypto history in June 2022 and is a strong indicator that investors are moving large sums of money into stablecoins as the ETH market cap declines.

Exit mobile version