“The overlooked narrative is that this metric documents the end of the exchange-custody era,” said Ben Nadareski, CEO of Solstice. “The real story isn’t just declining exchange balances, but where those assets are migrating.”
“Assets are exiting trading venues for two primary destinations: regulated custody solutions on one hand, and productive onchain positions on the other,” he added.
Furthermore, the historical correlation between declining exchange balances and subsequent bull runs is weakening. For example, throughout 2022, exchange supply remained low while prices plummeted.
Long-Term Holding Remains a Dominant Force
Although the metric has lost some predictive reliability, it doesn’t negate the reality that diverse market participants continue accumulating BTC in anticipation of higher prices.
“Over 130 public companies now hold bitcoin on their balance sheets, and spot ETFs have absorbed an increasing share into regulated custody,” Zalan noted.
Data from Bitcoin Treasuries indicates public companies hold roughly 1,264,579 BTC, private firms hold 281,752, government entities hold 649,954, and DeFi and other protocols hold 369,595. Meanwhile, ETFs and exchanges custody 1,622,533 BTC. The data also shows treasury companies hold approximately 7.252 million ETH.
Combined with nearly 7 million bitcoin sitting in dormant wallets, a total of just under 11.2 million BTC remains outside active circulation—representing approximately 56.5% of the current circulating supply of roughly 20.05 million.
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