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The growth of Bitcoin and crypto exchanges over the years reflects the evolution of the industry. Exchanges have been the most critical companies supporting blockchain and crypto protocols. Moreover, the exchanges, led by the biggest figures in the industry, are home to most of the iconic brands in the crypto ecosystem.

From the early days of Bitcoin until now, crypto exchanges have evolved and grown in many ways, earning the trust of users. However, things turned sour in the blink of an eye and users lost faith in crypto exchanges. The collapse of FTX has spread its contagion across the crypto space, dragging most crypto exchanges down.

Bitcoin Records Highest Trading Flow Since 2018

This week saw a massive outflow of Bitcoin from crypto exchanges after the collapse of FTX. Recent data from Glassnode reveals that Bitcoin is rapidly exiting exchanges. According to the report, users and investors have withdrawn all bitcoins that have flowed into exchanges since 2018.

Crypto Exchanges Record Massive Bitcoin Outflow, What Does This Indicate?
Bitcoin price struggles to rise BTCUSDT on Tradingview.com

Since FTX’s insolvency, primarily due to poor asset management, demand for BTC free-custody and spot markets has increased. This action has never been recorded in any previous bear markets Bitcoin has survived.

Bitcoin was not the only asset to see massive drawdowns. Stablecoins such as BUSD and USDC have also seen massive outflows from exchanges over the past seven days. On-chain data shows that many of the outgoing stablecoins have moved to self-custody wallets. Santiment data confirmed this report.

According to Santiment, there was a steady influx of stablecoins such as USDC, BUSD, and USDT into the crypto market in early 2022. Additionally, the data suggested that new investors were buying assets as prices were falling.

The market capitalization of stablecoins rose to $134.07 billion, with the influx of coins at the same time as BTC peaked. However, things have changed since the Fed’s interest rate hike in June.

Additionally, the stablecoin market saw a massive holding reshuffle after Binance revealed plans to convert USDC to BUSD.

Self-Guarding is the Way Forward: Santiment Report

Santiment pointed out that the recent crisis is teaching everyone to embrace self-care. The market has learned, which is reflected in the increased outflow of USDC and BUSD from the exchanges.

Several crypto firms and investors are facing the heat of FTX’s downfall. For example, Crypto venture capital firm Multicoin Capital lost nearly $1 billion in assets held on FTX. The extent of the damage in the crypto space and the massive outflow of assets and decline in value has left questions in everyone’s mind. Many wonder if crypto is still alive or dead.

There may still be hope since the crypto space has survived similar blows. The collapse of Mt.Gox is an event that has left a cascading effect on the crypto industry. The collapse of Terra also had a similar impact on crypto.

Featured image from Pixabay, chart from TradingView.com



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