Crypto Exchanges Confront Their Largest Ever Bitcoin Inflows Amid COVID-19: Report

Priyanka Kulkarni
Priyanka Kulkarni, post-graduated in Business Administration holds worthy experience in market research and investment banking. She is passionate to flaunt her perception towards cryptocurrencies.
  • Since March 9, a total of 1.1 million bitcoin was received by exchanges over eight days. On March 13, it raised to 319,000 bitcoin which is compared to an average of 52,000 bitcoin per day before March 9.
  • The trading frequency geared its speed as bitcoin flowing into the exchange was sold.
  • While retail-level activity improved significantly, the professional traders managed most of the increased exchange inflows.

Since March 9, a total of 1.1 million bitcoin was received by exchanges over eight days. On March 13, it raised to 319,000 bitcoin which is compared to an average of 52,000 bitcoin per day before March 9.

The story behind the bitcoin market fall

Chainalysis in their recent report highlighted happenings around the bitcoin and crypto market. Starting from March 9 and peaking on March 12 and 13, the exchanges roughly received 475,000 more bitcoin from March 12 to March 13, representing a nine times  increase in the daily average amount

After that, the inflows have dropped just two times the average.

From January 1 to March 8, 2020, exchanges received an average of 52,000 bitcoin per day. From March 9 until March 16, they received 1.1 million bitcoin or we can say 712,000 more than the average. Out of 712,000 bitcoin, between 40,000 and 240,000 remain on exchanges. The majority of excess bitcoin has been sold out, and the oversupply was looking to be finished now.

The trading frequency geared its speed as bitcoin flowing into the exchange was sold. Just seven-spot exchanges received nearly two-third of the increased inflows. Before March 9, those seven exchanges bitcoin traded volume was 249,000. After that, the average mounted to 790,000 bitcoin per day.

An increase in trading of bitcoin on these seven exchanges was mainly compared by their increased inflows, which suggest that drift in the trading was due to the entrance of new exchanges rather than it was already stocked on exchanges.

The extra bitcoin that came to the exchanges represents only 5% of the available bitcoin.

Involvement of the retail holders in Bitcoin

While retail-level activity improved significantly, the professional traders managed most of the increased exchange inflows. The amount of bitcoin that was moved inside and outside of the exchange through small transfers almost doubled since March 9.

This proves that there is the involvement of retail in both the buying and selling of bitcoin.

Moreover, the majority of bitcoin into the exchanges received from high-value transfers.  More specifically, transfer of 10-100 and 100-1000 bitcoins were responsible for almost 70% of bitcoin transacted by exchanges in recent days.

Thus, it suggests that big pocket professionals and investors were involved in driving the market, but they were conjoint by massive retail holders.

On one side the whole world is battling with the COVID-19 pandemic, it is difficult to foresee what will be the future of the bitcoin market.

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