Bitcoin investors are choosing self-custody over bank custody following the Silicon Valley Bank incident, according to data from Glassnode. Around 70,000 bitcoins have been moved into individual wallets for self-custody since the collapse of the bank. Self-custody is considered advantageous for investors as it allows them to manage their assets on their own, without the need for a third-party bank.
CoinMarketCap data shows that Bitcoin recorded a value of $24,800, up 0.6% from 1 hours ago, before the departure of the New York market. However, data tracked by ByteTree Asset Management shows that the number of coins held by close-ended funds, spot and futures-focused exchange-traded funds (ETFs) in Europe, the U.S. and Canada has declined by 16,560 BTC ($409 million) this month, reaching a 17-month low of 826,113 BTC.
ETFs and other investment vehicles that allow exposure to bitcoin without owning the cryptocurrency are considered a proxy for institutional activity. The decline in fund balance suggests a lack of institutional participation in bitcoin’s recent rally, reportedly fueled by safe-haven demand and renewed hopes for Fed rate cuts in the second half of the year. Despite this, some observers suggest that bitcoin’s recent gains are evidence of its strengthening appeal as a hedge against the banking system.
The recent spike in self-custody follows the collapse of Silicon Valley Bank, which was formerly one of the top 20 lenders in the U.S. Bitcoin picked up a strong bid near $19,600 late on Friday and has risen over 25% since then, reaching a nine-month high of $26,500 on Tuesday. The rise in self-custody may reflect a lack of trust in banks and traditional financial institutions, and a growing desire for individuals to take control of their own assets.
Read more:
- Arthur Hayes Calls Cryptocurrency’s Sustained Bull Run The “Most Significant Financial Occurrence Since COVID-19”
- BitMEX Co-Founder Arthur Hayes Predicts Bull Market For Cryptocurrencies