Bitcoin exchange is increasing as “not your keys, not your crypto” is back in vogue

Bear markets in cryptocurrency are known to be painful, but June was particularly trying for cryptocurrencies, as a confluence of factors resulted in the price of Bitcoin (BTC) falling 37.9%, the worst monthly performance since 2011.

As a result of the continuing widespread weakness, a majority of the so-called Bitcoin “tourists” have now left the place, and only the most dedicated holders are left, according to blockchain analysis firm Glassnode.

Despite Bitcoin’s ongoing battle and the fact that crypto traders are currently experiencing the worst bear market in the sector’s history, several calculations suggest that the outlook is not as serious as some predict, and that the hodler base for the crypto market is still strong.

Dedicated hodlers increase in number

A significant purge of active Bitcoin wallets is a common occurrence during major sales events as well as in early bear markets, according to Glassnode. However, the severity of the emigration has decreased since the bear market in 2018, indicating that “there is an increasing level of determination among the average Bitcoin participant,” Glassnode said.

During the recent reduction in the number of addresses with a non-zero balance, only 1% of Bitcoin addresses completely cleared their holdings compared to 2.8% between April and May 2021, and the full 24% who did the same between January to March 2018.

While the chain activity for Bitcoin remains subdued and solid in the bear market’s territory, the most dedicated Bitcoin holders continue to hold the line, and are likely to continue to do so until market turmoil subsides and a floor in the BTC price is established.

A return to best Bitcoin practices

The ethos of “not your keys, not your crypto” is gaining ground in the crypto community again as traders have withdrawn tokens from stock exchanges at a hectic pace. The collapse of the Terra ecosystem, the potential insolvency of Celsius and the implosion of Three Arrows Capital have all served as a strong reminder that crypto is meant to be stored in cold storage.

Since March 2020, the number of Bitcoin held on stock exchanges has fallen from 3.15 million to 2.4 million. This is a total outflow of 750.00 BTC with 142,500 of the total amount that has occurred in the last three months.

With platforms like Celsius stopping withdrawals and smaller exchanges starting to set limits on the amount that users can remove, the desire to regain personal control over cryptocurrencies has become a major concern for holders.

This can in fact be seen as positive for prices in the long term as the probability of further capitulation decreases when tokens are locked in cold storage and not easily available for sale on exchanges.

Related: With the bear market in full swing, crypto derivatives retain their popularity

Retail is starting to gain interest

Another encouraging development in the middle of the worst month in Bitcoin’s history is a growing interest from wallets with less than 1 BTC, which are more likely to represent the retail group to the crypto market.

These so-called “shrimp” wallets have eagerly acquired low-priced Bitcoin worth 60,460 BTC per month, according to Glassnode, which is “the most aggressive exchange rate in history.”

Even with crypto in a bear market, several underlying calculations, including a dedicated group of crypto-holders and growing interest from smaller retail buyers. suggests that calls for Bitcoin’s death again are premature.

To see, #bitcoin the balance on the stock exchanges continues to decline …

Some understand that there will only ever be 21 million $ BTC. They get their share of the pie. pic.twitter.com/NSVBJicjZo

– Lark Davis (@TheCryptoLark) July 5, 2022

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