Kraken Sees Reserves Drop Amid Largest Outflows of BTC and ETH in 8 Years

KONSKIE, POLAND - August 10, 2022: Smartphone displaying logo of Kraken cryptocurrency exchange on stock exchange diagram background
Source:AdobeStock
  • Kraken saw its largest historical outflow of US$3.33 billion, causing Bitcoin reserves to drop to 2018 levels.
  • Ethereum reserves on the exchange fell below 1 million ETH, levels not seen since 2016.
  • Other major exchanges, including Coinbase Pro and Binance, also experienced significant outflows, indicating potential market shifts.

An analysis by CryptoQuant reveals that exchange Kraken has just experienced the largest outflow of funds in Dollar terms in its history. According to the analysts, the total outflows are US$3.33 billion (AU$4.97 billion) or 49,100 Bitcoin, a volume not seen since 2017.

Related: Breaking: Australia’s First Bitcoin ETF Directly Holding BTC Goes Live on CBOE

The outflow means that the exchange’s reserves have now significantly dropped.

As a result, Kraken’s Bitcoin reserves have dropped to the same level as in 2018, now holding 122,300 BTC. For Ethereum, this is the first time Kraken’s reserves have fallen below 1 million units, a level not seen since early 2016.

CryptoQuant

ETH outflows were to the tune of 572,100 ETH or US$2.15 billion (AU$3.21 billion).

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BTC exchange reserves on Kraken exchange, source: CryptoQuant

While the analysts acknowledged that the fund flow could be due to a repositioning effort by Kraken, they said it could also be part of a larger strategic institutional move.

All Exchanges Report Low Reserves

According to data from Coinglass, Kraken’s 30-day outflow now totals 53,048 BTC. This is the largest monthly outflow among the 20 largest exchanges, with a total of 86,419 Bitcoin moving across all exchanges.

Coinbase Pro (-24,718 BTC) and Binance (-6,680 BTC) also saw large outflows. Bitfinex (+8,596 BTC) and OKX (+3,762 BTC), on the other hand, saw the largest inflows of the top ten central exchanges.

BTC exchange balances across 10 largest exchanges, source: Coinglass

BTC-ECHO analyst Leon Waidmann believes a supply squeeze is incoming and urges traders to prepare themselves “for the next big move”.

Ethereum ETFs Drive Demand Upward

One important factor for continued demand for BTC and ETH is the exchange-traded funds. The Ether ETF applications in the US are rumoured to start trading by the start of July – meanwhile, Australia has just listed the first BTC ETF that trades directly in Bitcoin.

While the country already had a BTC fund, the new fund with the ticker IBTC allows subscription and redemption in-kind.

Over in the US, the Spot Bitcoin ETFs added another 2,413 in BTC worth over US$166 million (AU$248 million). According to Lookonchain, the 7-day net inflows now account for over 4,972 Bitcoin valued at US$342 million (AU$512 million).

BlackRock, which has become the largest fund, now holds US$20.07 billion (AU$30.05 billion) or 291,563 Bitcoin.

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Aaron Feuerstein
Author

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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