Kraken Faces Massive Bitcoin Outflows as Liquidity Hits 2017 Low

  • The Kraken Exchange is currently facing a significant liquidity crisis, with both Bitcoin (BTC) and Ethereum (ETH) reserves hitting their lowest levels since 2017.
  • This sharp decline in reserves is driven by the increasing demand for cryptocurrencies, influenced by the buzz around spot Bitcoin and Ethereum ETFs.
  • Joao Wedson from Dominando Cripto highlights a notable drop in Kraken’s Bitcoin and Ethereum holdings, marking the first such instance for Ethereum since 2016.

Kraken Exchange faces a severe liquidity crunch as Bitcoin and Ethereum reserves plunge to levels unseen since 2017. This development could significantly impact the crypto market outlook.

Kraken Exchange Confronts Alarming Liquidity Crisis

American trading platform Kraken is grappling with a massive outflow of Bitcoin and Ethereum, leading to its lowest reserve levels since 2017. This decline has been attributed to soaring demand spurred by spot Bitcoin and Ethereum ETFs.

Detailing the Decline: Insights from CryptoQuant

According to Blockchain analytics platform CryptoQuant, Joao Wedson, CEO of Dominando Cripto, provided a quantitative perspective on this supply crunch. He stated, “Kraken’s Bitcoin reserves have dropped to 122,300 BTC, a level not seen since 2018. Similarly, Kraken’s Ethereum reserves have dipped below 1 million units, a figure last recorded in early 2016.”

Impact of Exchange Outflows on the Cryptocurrency Market

The increasing demand for spot Bitcoin and Ethereum ETFs has significantly strained cryptocurrency reserves on exchanges like Kraken. This supply drain is a critical development for the market, signaling potential price volatility and supply shortages if the trend continues.

Understanding the Market Dynamics

The frenzy around spot ETFs has led to a surge in cryptocurrency purchasing, both as an investment strategy and as a reaction to Fear of Missing Out (FOMO) on bullish trends. As a result, reserve quantities have been depleting at an alarming rate. Over 777,000 ETH, valued at approximately $3 billion, have been withdrawn from exchanges as of June 2, even before the trading of spot Ethereum ETFs has commenced.

Potential Price Surge Due to Supply Shock

Currently, Bitcoin is trading at $69,252.47, showing a 1.75% increase over the past 24 hours, while Ethereum sits at $3,787.97, showing a minor decrease of 0.21%. Analysts predict that the ongoing supply crunch could trigger a significant rise in the prices of these assets in the forthcoming months.

Expert Predictions and Market Sentiment

Beyond the immediate supply issues, analysts are optimistic about the continued growth of the cryptocurrency market. Apollo co-founder Thomas Fahrer made a bold prediction, suggesting that Bitcoin could reach $3.5 million per coin by 2030. While current trends may not fully support this forecast, a surge in Bitcoin could also bolster the market value of other digital assets.


Kraken Exchange’s liquidity reduction in Bitcoin and Ethereum underscores a significant shift in the cryptocurrency market, influenced greatly by the introduction and anticipation of spot ETFs. This situation is likely to induce increased market volatility, with potential for dramatic price movements. Investors should watch these developments closely to navigate the evolving landscape.

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Gideon Wolf
Gideon Wolf
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.

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