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The amount of Bitcoin available on the world’s largest cryptocurrency exchange is rapidly decreasing. This growing scarcity, which is one of the most noticeable trends in recent months, coincides with data indicating that large investors are accumulating the asset, potentially leading to a supply shortage.

 

According to data provided by Arab Chain, Binance’s Bitcoin Scarcity Index rose during the month, reaching a reading of 9 in late October. This index directly measures the amount of Bitcoin available for instant trading on the exchange. In simple terms, a rising index shows that Bitcoin becomes increasingly scarce on Binance. The analytics platform notes that this typically signals an accumulation phase where whales and large investors buy and withdraw Bitcoin from Binance, effectively removing it from circulation.

“This is generally regarded as a positive long-term signal that supports the likelihood of continued upside in the medium term, despite short-term price fluctuations, as buyers appear to be racing to acquire Bitcoin in the market,” said Arab Chain. The evaluation also highlighted that these supply drops often accompany good news or unexpected capital inflows.
Whales’ private wallets are not the only drivers of Bitcoin moving off exchanges.

This trend showed some major Bitcoin holders transferring their assets into spot Bitcoin ETFs, such as those offered by BlackRock. These “in-kind” transfers allow whales to exchange their Bitcoin for ETF shares without triggering a taxable event, which could further reduce the liquid supply on crypto exchanges.

Currently, Bitcoin trades at $110, down from $111,400 yesterday. The Federal Reserve announced it would lower interest rates for the second consecutive time. Although the price has increased by 1.2 percent over the past week, the 30-day view shows a 3.4 percent decline, and it remains more than 12 percent below the new all-time high of $126,000 reached in early October.