I know we're having a premium stacking opportunity right now with prices falling by more than 50% from the all-time high, sort of a mild retracement compared to previous years percentage-wise, but still enough to freak out normies and first cyclers. But I've been watching the amount of bitcoin leaving exchanges and it seems like this cycle, we're seeing people get to the level of self custody faster than in previous cycles and exchange balances are dropping.

Source: - .coindesk.com

Exchanges obviously can't offer that much interest on bitcoin to get people to turn tale and leave it on exchanges, especially with all the shitcoin market-making they have to do creating BTC pairs with shitcoins. So I am wondering how bad bitcoin rehypothecation on these exchanges are, these smaller markets may only have 1 or 2 BTC backing their entire order book, and people who trade shitcoins don't really take custody, they looking to trade back out probably for a stablecoin, so an exchange could in theory use 1 or 2 BTC and back multiple markets knowing they can cover redemption risk watching the flows.

What I wonder is how much paper bitcoin is running the current float and suppressing the real price? Not that I mind getting cheaper bitcoin, I'm just thinking for every person getting this subsidised bitcoin there's going to be someone who might not get their redemptions filled in the future.

I think people need to consider the increased custody risk