Bitcoin Vaults Empty: Exchange Reserves Hit 7-Year Low as Hodlers Dig In
Exchanges are bleeding Bitcoin—supply just cratered to levels not seen since the 2018 crypto winter. Traders aren’t selling; they’re bunkering down like preppers before a halving.
Where’d all the coins go?
Cold wallets. Institutional custody solutions. Even that sketchy USB drive buried in your backyard. Everyone’s playing musical chairs with BTC—except the music stopped and nobody’s leaving.
Wall Street analysts (predictably) confused
Traditional finance still can’t decide if this is ’irrational diamond-handing’ or the smartest asymmetric bet since shorting mortgage-backed securities in 2007. Meanwhile, Bitcoiners keep stacking sats like there’s no tomorrow—which, for fiat currencies, might not be far off.
Bitcoin price chart, including gold correlation (blue) and Nasdaq correlation (turquoise). Source: TradingView
But Bitcoin’s actual correlation with gold since the beginning of the year has see-sawed considerably, taking in 0.74 at the end of January, –0.87 in early February, 0.54 in early March, –0.36 in mid-March, 0.62 at the end of March, –0.50 in early April, and 0.55 as of this writing.
It would therefore be premature to conclude that Bitcoin genuinely is beginning to behave like digital gold, even if its recent performance amid the backdrop of economic uncertainty has played into this narrative.
On the other hand, one piece of data that does give more support to the SAFE haven thesis is the Bitcoin dominance index, which is the ratio of BTC’s market cap to the capitalization of the entire crypto market.
According to CoinMarketCap, this has risen from 54% in early December to 63.4% today, something which could be taken as a reflection of traders moving from very volatile alts to the less volatile BTC.
At the same time, the Bitcoin volatility index has generally been fluctuating within a narrower band over the past couple of years, witnessing fewer of the large spikes that would occur prior to 2023.
However, there has been no particular or further reduction in its volatility in the past few weeks, with April 7 yielding the index’s second-highest reading of 2025, when it ROSE from 3.4 to 6.71 as the coin plunged to a five-month low of $74,773.
Edited by Stacy Elliott.
