Bitcoin investors are seeking more autonomy over their investments due to the growing instability of the banking industry. This has resulted in a rise in self-custodial withdrawals, with substantial quantities of BTC removed from the markets.
Bitcoin’s ability to be held privately has long been a draw for investors. It enables them to manage their investments independently of banks or other intermediaries. The recent banking industry worries have caused a rise in self-custody withdrawals.
Yesterday was a turning point for self-custody because withdrawals increased significantly over the previous six months. Since SVB’s demise on Friday, almost 70,000 BTC have entered self-custody, continuing this pattern.
Investors are deeply concerned about the security of their money as a result of SVB’s failure. Many investors choose self-custody to take control of their Bitcoin assets as the banking industry grows more unreliable.
Bitcoin Surge During The Pandemic Highlights Its Role As A Global Liquidity Indicator
With the ongoing COVID-19 pandemic, Bitcoin, the most popular cryptocurrency, is developing a new reputation as a worldwide liquidity indicator. Although it has traditionally been considered a hedge against inflation, further information may also offer helpful information on the expansion or contraction of balance sheets.
Experts say it’s crucial to consider Bitcoin’s close resemblance to the net liquidity indicator. The net liquidity indicator, which has significantly increased year to date, measures the difference between the Federal Reserve’s balance sheet and the Treasury’s general account.
The expansion of China’s and Japan’s balance sheets is thwarting efforts by the Federal Reserve and European Central Bank to engage in quantitative tightening. Despite these efforts, the combined balance sheet of the four most prominent central banks—the US, Japan, China, and Europe—has grown from $25.6 trillion to $26 trillion this year.
Yet, the crypto markets are experiencing liquidity issues due to a declining order book depth. It might cause erratic price changes on the upside or the negative. Since Bitcoin remains a crucial gauge of global liquidity in these unsettling times, experts advise investors to exercise caution and vigilance.
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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing