Arcane: VTS owners withdraw funds from exchanges and cryptocurred services – Bits Media

According to the research agency Arcane Research, Cryptocurrency owners massively withdraw funds from exchanges and cryptocurred services, Preferring to store them on cold wallets.

The events of the first half 2022 of the year, Cryptocurrency, Forced many crypto asset holders to reconsider their risk management practices. The collapse of decentralized finance protocols (DeFi) and the bankruptcy of crypto lending platforms confirmed the thesis - “who owns the keys, he manages your cryptocurrency".

Hodlers have been moving their precious #bitcoin out of exchanges like never before following this summer’s collapse of major crypto lenders.

These events undoubtedly damaged the lenders’ trustworthiness, but are hodlers also losing trust in exchanges? pic.twitter.com/v4Tr0rNOaS

— Arcane Research (@ArcaneResearch) August 22, 2022

This trend is especially clearly illustrated by the behavior of Bitcoin holders.. As a result of blocking or loss of funds, BTC owners began to withdraw their assets from exchanges at an astonishing rate. Analysts note, that after years of growing trust in crypto exchanges and lending platforms, counterparty risk suddenly became the most important factor.

This was facilitated by a “cascade of negative events”, lasting until July, when some of the largest participants in the cryptocurrency market collapsed". So, hedge fund Three Arrows Capital, Crypto lender Celsius and broker Voyager Digital are now at one stage or another of bankruptcy. The collapse of these companies led to the blocking of client funds and, probably, the consequence will be a complete loss of assets.

“In June, the net outflow from exchanges amounted to 119 000 Vts, which was the highest figure since November 2020 of the year. In July, it was withdrawn from the exchanges 96 000 Vts. The outflow of funds during exchange continued in August, and for the first 22 day of the month was displayed 65 000 VTS », - says the report.

Total number of bitcoins, stored on exchanges, is now at its lowest level since July 2018 of the year. Investors are on the defensive and are very reluctant to invest in cryptocurrency investment products.. Last week's Coinshares report shows, that outflows from investment products for digital assets amounted to more than $8 mln.

Arcane Research concluded, that in general, crypto asset holders continue to have a positive opinion regarding the future of the industry. However, they are no longer ready to trust their cryptocurrency to third-party services and have returned to the original idea - to be independent custodians of their own funds.

Previously Arcane Research experts, Having studied the mining market for 2022 year, We came to the conclusion, that the crisis almost led to its collapse and it will take a significant period of time to restore the sector.