By
Temitope Olatunji
April 26th, 2024
Goldman Sachs reported that the total monthly Bitcoin inflows from miners to centralized exchanges almost doubled from May to $99 million in June.
A new report from Goldman Sachs Group Inc (NYSE: GS) shows that Bitcoin (BTC) and Ethereum (ETH) supply on centralized exchanges (CEXes) significantly reduced in June as holders migrated to self-custody services. The migration majorly caused by the ongoing crypto regulatory crackdown and increased fear of theft through hacks saw Bitcoin and Ether supply on CEX drop to levels not seen YTD. According to the report, Bitcoin supply dropped 4 percent, nearing the level of December 2022, while Ether supply declined 5.8 percent in June to levels not seen since May 2018.
As for Ethereum, most holders preferred to stake and earn passive returns while storing securely instead of just holding on centralized exchanges. Moreover, increased risks of hacks and rug pull on centralized crypto firms has the old slang ‘not your keys, not your coins’ at work.
Interestingly, crypto investors continued to hold and add more coins in recent months despite the prices showcasing overbought features. Investors remain highly bullish on Bitcoin and Ethereum in the long term, especially with increased institutional crypto demand.
In June, the Bitcoin market led the altcoins in gains following an ETF frenzy from key institutional investors. Although the SEC has remained adamant in approving the first Bitcoin ETF in the United States, the underlying crypto demand by institutional investors is undeniable.
As Bitcoin price rallied towards $31k last month, on-chain data analyzed by Goldman Sachs shows miners increased their profit taking, perhaps fueled by the fear of a possible correction. Specifically, Goldman Sachs reported that the total monthly Bitcoin inflows from miners to centralized exchanges almost doubled from May to $99 million in June.
Bitcoin and Ethereum Market Outlook
The top two digital assets by market capitalization continued to record increased on-chain activities in June. Heightened DeFi development on Ethereum and the uprising use of Bitcoin ordinal dubbed BRC-20 standard were identified as the root cause of increased activity. For instance, the Binance exchange was at one time forced to halt withdrawals following heightened network congestion that resulted in a sharp uptick in transaction fees.
The report by Goldman Sachs further highlighted that the monthly address activity for Bitcoin and Ethereum increased by approximately 15.5 percent and 37.5 percent respectively in June. The increase in on-chain activity was also underpinned by the fact that the daily average new address count for Bitcoin and Ethereum gained by approximately 9.8 percent and 48.2 percent monthly.
Worth noting, the Goldman report highlighted that the average daily Ether burnt on the beacon chain in June dropped by approximately 65.1 percent while the average daily fees dropped by about 63.3 percent.