Key Insights:
- More than 5 billion dollars worth of bitcoin left exchanges as per data provided by the on-chain data collation platform.
- Part of FTX’s liquidity issues prevented users from withdrawing their funds, triggering the massive stablecoin withdrawal frenzy.
- After the cancellation of the buy-out deal between Binance and FTX, the crypto market entered a flash dip, and several other large exchanges have experienced massive withdrawals.
As Binance withdrew from the buy-out deal with its rival, FTX, crypto investors continued to withdraw funds, especially bitcoin, from key exchanges on Wednesday last week, with stablecoin outflows marking the most significant volume in almost five months.
More than 5 billion dollars worth of stablecoins left exchanges as per data provided by the on-chain data collation platform, CryptoQuant as of last week, when the FTX saga was still hot. According to this data, the number of stablecoin withdrawal transactions on exchanges increased to 57,917 from 7,016 over seven days.
“As a result of FTX’s restructuring,” says Rachel Lin, a co-founder and CEO of the decentralized derivatives market SynFutures, based in Singapore. “it is not surprising that assets are leaving centralized exchanges.”
Crypto investors are appropriately anxious at the moment, she says. Part of FTX’s liquidity issues prevented users from withdrawing their funds, triggering the massive stablecoin withdrawal frenzy.
Bitcoin Withdrawals Hit 17-Month High
According to the crypto on-chain data alert platform, Glassnode, the 7-day moving average on the number of bitcoin exchange Withdrawals has reached a 17-month high of 3,424.315.
This comes after the largest crypto exchange in the world (by trading volume), Binance, announced that it would sell all of its FTX Token (FTT) holdings. FTX and its sister trading firm Alameda Research had insolvency issues.
After the cancellation of the buy-out deal between Binance and FTX, the crypto market entered a flash dip, and several other large exchanges have experienced massive withdrawals.
Earlier on Monday this week, Glassnode also published a thread detailing mass withdrawals on the part of Bitcoin investors, stress on the bitcoin miners, and a spike in stablecoin daily inflow on exchanges.
According to Glassnode, Bitcoin investors have been withdrawing coins to self-custody wallets at a historical pace of 106k $BTC/month since FTX’s bankruptcy.
The data alert platform also compares this to just three other times in history:
- April 2020
- November 2020
- June-July 2022
Glassnode also adds that given the all-time low of bitcoin’s hash price, it is highly likely that the mining industry will continue to be under pressure.
Bitcoin Miners Under Pressure
Bitcoin miners are under pressure as they have distributed more than 7 thousand $BTC in the last week.
Additionally, on November 10th, this week saw one of the most notable one-day stablecoin inflows across all exchanges.
Following the FTX’s crash and burn, over $1.04 billion of stablecoins flooded exchanges.
Overall, Glassnode notes that investor holdings are changing.
Stablecoins are entering exchanges, while trustless assets like Bitcoin and ether are leaving. This increases about $4 billion per month in stablecoin’s “buying power” on exchanges.
CZ Speaks Out On The FTX Saga
According to a tweet from Lucas Schor, the co-founder of Safe, the Ethereum self-custody platform, this week: Safe has seen over $800 million in net inflows since last Tuesday and $325 million on Thursday.
Schor says that this indicated a flight response by crypto investors to self-custody after the FTX liquidity issues of last week.
Changpeng Zhao (better known as “CZ”) has also commented on the crypto self-custody frenzy via a tweet.
In the tweet, CZ mentions that self-custody is a “fundamental human right.” Anyone is free to do it whenever they want; only that one has to be careful to execute it correctly.
CZ recommends starting slowly and learning the technology and tools because “errors can be very costly.”
He also cites an article he wrote two years ago, detailing the importance of self-custody and keeping one’s crypto safe. Finally, he ends the tweet by saying that Binance may be a centralized exchange but that they offer choices.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
