Kraken Faces Major Bitcoin and Ethereum Withdrawals Amid Surging Demand

• Kraken’s Bitcoin reserves are 122,300 BTC, which is the same as 2018 levels.
• Many exchanges are feeling the pinch from the soaring demand for Bitcoin and Ethereum.

The biggest withdrawals of Bitcoin (BTC) and Ethereum (ETH) from the cryptocurrency exchange Kraken since 2021 have occurred recently. The current exchange supply crisis was described in depth in a post by Joao Wedson, founder and CEO of Dominando Cripto, which was cited by CryptoQuant, a blockchain analytics firm.

Wedson reports that Kraken’s Bitcoin reserves are 122,300 BTC, which is the same as 2018 levels. Since early 2016, this marks the first occasion that Kraken’s reserves have dropped below 1 million units for Ethereum.

Investors Optimistic

Kraken is predisposed to this position in part because of the hoopla around spot Bitcoin ETFs and, more recently, spot Ethereum ETFs. Due in large part to the introduction of spot Bitcoin ETFs, the number of people interested in investing in cryptocurrencies has exploded in the past five months.

For a variety of reasons, including diversifying their holdings and capitalizing on major bullish trends, a large number of crypto aficionados have made steady market purchases.

Many exchanges, Kraken included, are feeling the pinch from the soaring demand for Bitcoin and Ethereum. Exchanges are starting to run out of cryptocurrency reserves. Even though the Ethereum ETF has only been approved by the SEC for a week, exchanges are already seeing a lack of liquidity.

More than 777,000 ETH, worth about $3 billion, have been removed from cryptocurrency exchanges as of June 2nd. Despite hopes for quick approval of S-1 registrations, trading in spot Ethereum ETFs has not yet begun. If current trends continue, these digital assets will soon face a supply shock, which could have an effect on their pricing over time.

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