What is the signal of Bitcoin flowing out of an exchange? Is it going up or down?

Bitcoin is the well-deserved leading currency in the field of digital currency. Bitcoin has many supporters and firm supporters. Many firm supporters of Bitcoin will hold a large amount of Bitcoin. But now the number of Bitcoins withdrawn from cryptocurrency exchanges has exceeded the number of Bitcoin deposits. The outflow of this kind of encrypted digital currency actually reflects a certain amount of information. We can see that current investors have a negative attitude toward the global economy. The situation and stability of the cryptocurrency space is unsettling.

What is the signal of Bitcoin flowing out of the exchange?

Cryptocurrency liquidity has been declining since February. The transfer of funds to private wallets has accelerated in recent days. Over the past five days, customers of the exchange have withdrawn more than 20,000 Bitcoins.

Despite the volatility, Bitcoin holders appear to be withdrawing funds from exchanges. Outflows have been increasing every day since March 18.

As the global economy recovers from the health crisis of the “pandemic”, more and more individuals are beginning to move their assets to safe places. After an early sell-off, investor interest in the precious metal is growing. Gold prices have surged over the past few days, rising 6% in 24 hours. Likewise, Bitcoin appears to be rebounding from a sharp pullback earlier this month.

In this environment, it makes sense that more and more crypto owners would want to keep their funds in personal wallets rather than leaving their Bitcoins on exchanges waiting to be traded. Personal key ownership is the cornerstone of Bitcoin's security, so for most investors, getting your Bitcoin back is a smart move. This fact is especially important for those looking to hoard rather than trade.

A popular saying in the cryptocurrency community is: It’s not your keys, it’s not your cryptocurrency. Never share your 24-word recovery phrase with anyone!

Other issues may also affect Bitcoin outflows. More exchanges than ever are implementing “know your customer” (KYC) policies that are widely derided by cryptocurrency advocates. Given the increased interest in this issue from regulators and governments, now may be a good time to hold Bitcoin as an individual, if you wish to do so anonymously.

It is worth noting that this rush to withdraw Bitcoin reflects people’s greater trust in the long-term value of Bitcoin and other blockchain assets. By transferring funds to personal wallets, investors obviously want to preserve their Bitcoins for a long period of time. As many economists predict, they may also accelerate the adoption of Bitcoin as currency if the value of fiat currencies starts to fall soon.

What exactly is Bitcoin used for?

Bitcoin, which has suddenly emerged in the past two years, has already left gold and others far behind at its current price (as of February 6, 2018, 1 Bitcoin is worth US$8,000 and 1 ounce of gold is US$1,342).

The basis for supporting the value of Bitcoin include, for example, the theoretical upper limit of 21 million, which requires a large amount of electricity consumption, blockchain anti-counterfeiting technology, etc. But you must know that gold cannot be synthesized artificially, nor can it be produced using the nuclear fusion energy in the core of the sun. Not to mention, the earth or even the solar system does not produce gold. According to current technological explanations, there are only three sources of gold in the universe. One is the collision of neutron stars, one is the explosion of a supernova, and the other is a black hole. No matter which one occurs, it means the eternal reduction of matter in the universe. Therefore, gold not only has an upper limit, but also consumes the destruction of a galaxy as a price. The most important thing is that every piece of gold produced is unique.

More realistically, once the current world structure changes, for example, a global war occurs, should you take refuge with gold or Bitcoin?

So the high value of Bitcoin lies more in the fact that it proposes a new concept, rather than as a currency itself.

Bitcoin itself has no use value, and the encryption that boasts of it cannot be cracked. Since humans can create Bitcoin, they can also create a second Bitcoin and a third Bitcoin, which are indistinguishable from Bitcoin. Therefore, Bitcoin is said to be awesome.

It is not entirely correct to say that Bitcoin has no value. It now has a practical value, that is, it has become a black market criminal capital chain. However, this kind of capital chain should not last long, because there will be more powerful "cryptocurrencies" in the future. After all, human beings are developing.

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