Users' reluctance to risk security and governmental scrutiny has caused a rush of bitcoin to leave exchanges in the last week.
United States exchanges are particularly experiencing significant BTC balance decreases, according to data from on-chain monitoring tool Coinglass.
U.S. Exchanges Leading the Bitcoin Migration
Following the FTX crisis, efforts to highlight the risk associated with custodial BTC storage increased on social media.
The $3 billion in cryptocurrency that was withdrawn in the week following the solvency fiasco and the record-breaking amount of hardware wallet orders suggest that users took heed of the warning.
While the fallout from FTX has only just begun, investors' anxiety is only intensifying as regulators prepare to launch an investigation and pay greater attention to the cryptocurrency industry as a whole.
According to the data, the pattern is still there when it comes to withdrawals from exchanges. Almost all major platforms have seen net withdrawals outpace deposits over the last seven days.
Gemini has had the largest weekly decline with a loss of about 30,000 BTC, and it is closely followed by Kraken, Binance, and Coinbase.
Since the United States will likely continue to play a significant role in the FTX saga, it is not surprising that U.S. exchanges have seen particularly high withdrawal rates.
The exchange's former CEO, Sam Bankman-Fried, is apparently scheduled to be extradited to the United States from the Bahamas. This week, Congress announced a special hearing into what transpired at the exchange.
According to mainstream media, the hearing will be held by the House Financial Services Committee. U.S. Representative Maxine Waters said:
“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds.”
Meanwhile, according to the Coinglass data, not even those exchanges that have no exposure to FTX have been able to stop the exodus.
134,000 BTC, or around $2.2 billion at the current exchange rate, have been removed from their books over the course of the past week, with about $1.5 billion coming from American platforms.
"Acute Financial Crisis"
This is supported by data from the on-chain analytics company Glassnode. An organization that has been a long-term holder of coins for at least 155 days is 33% in the hole.
Only the depths of the 2018 bear market, when the average tally reached 36%, come close to matching this.
LTHs were described as being in "acute financial crisis" in the accompanying comments.