BITCOIN EXCHANGE RESERVES AND NET FLOWS

Why watch exchange wallets?

An exchange is where most people buy and sell Bitcoin, and while your coins sit there the exchange holds them in wallets of its own. Watching those wallets is one of the oldest reads in the market. Coins arriving usually means someone is getting ready to sell, and coins leaving usually means someone has decided to hold on to them instead.

Why are there two different totals?

This page counts the coins two ways and keeps them apart on purpose. One count is the coins sitting on the exchange addresses we have identified, counted directly with no guessing about which other wallets belong to the same exchange. The other is the set of exchange wallet groups we can pick out of the chain ourselves, by watching which addresses spend together. Both are measured by Maketo, and the page says which one every number comes from.

Why don’t the two counts match?

Neither count contains the other, so the page never subtracts one from the other. Today the addresses we know hold far more than the groups we can trace, and the gap is coverage rather than disagreement. We learn that two addresses belong to the same owner by catching them spending from one transaction. A wallet that only ever receives coins never proves anything about who owns it, so it stays invisible to that method. Exchanges keep most of their Bitcoin in an offline vault that receives coins and then sits still for years, which means the part the tracing cannot see is mostly the part that never moves.

What can the traced coins tell us?

What the traced set buys is a set of questions a plain count cannot answer. Because we can see the day each of those coins landed, we can say what it was worth when it arrived, whether it is worth more now, and how long it has sat. Every one of those is an average over the traced set, and this page says so each time it prints one. The table of exchanges on the coins held page counts each exchange on both sets, which is why an exchange can show no coins we can trace while holding plenty on addresses we know.