The crypto analytics platform – Santiment – indicated that the amount of bitcoin held on digital asset exchanges has recently plummeted below 6%. The last time the figures were that low was in December 2017.

The decreased trust in centralized platforms intensified shortly after the fallout of FTX (one of the leaders in its field prior to its bankruptcy). Binance has also seen a rise in bitcoin outflows during the past several months, signaling that many users prefer to rely on self-custody over a third-party custodian.

BTC Holders Keep Losing Confidence in Exchanges

As analyzed by Santiment, bitcoin’s supply held on exchanges has fallen to 5.84% – the lowest point in the past five and a half years.

The rapid shift from custodians to self-custody methods started at the beginning of 2022 and continued throughout the following months. A steep decline occurred after November last year when the amount of BTC sitting on centralized platforms dropped under 7%. 

The FTX meltdown could be considered a major factor. Back then, many investors lost trust in exchanges considering the shocking collapse of the once-prominent entity that was valued at over $32 billion. 

Binance – the world’s largest cryptocurrency exchange – witnessed a massive wave of customer withdrawals in December last year, which (according to CEO Zhao) was