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Escape of Bitcoin from cryptocurrency exchanges

La growth of exchange di Bitcoin and others cryptocurrency over the years it has been a symbol of the evolution of the sector. The exchanges have been the fundamental activities in support of the blockchain and cryptocurrency protocols, and – often led by some of the most prominent figures in the industry – have gained ownership of most cryptocurrency assets.

From their inception to today, cryptocurrency exchanges have evolved and grown in many ways, earning the trust of users. However, things have escalated rapidly in recent times, and users have lost trust in them. The collapse of FTX did the rest, promoting contagion throughout the cryptocurrency ecosystem, causing the collapse of most exchanges.

As a result of the above, there has been a massive outflow of Bitcoin from cryptocurrency exchanges this week as a result of precisely the collapse of FTX. Recent data from Glassnode reveal that it was mainly Bitcoin deposits that paid the price, so much so that, according to the latest available data, users and investors have withdrawn practically all the Bitcoins flowing into exchanges since 2018.

However, Bitcoin was not the only asset to record massive withdrawals. Stableoins like BUSD and USDC have also seen massive outflows from the exchanges over the past seven days. Blockchain data shows that a large number of outgoing stablecoins have moved into self-custody wallets. Santiment's data confirmed this relationship: according to Santiment, in fact, in the beginning of 2022 there was a steady influx of stable currencies such as USDC, BUSD and USDT in the cryptocurrency market, with new investors buying assets as prices fell.

Il market cap of stablecoins it soared to $134,07 billion, with the coin influx around the same time as BTC peaking. However, that changed after the Fed hiked interest rates in June. Furthermore, the stablecoins market experienced a massive reshuffling of holdings after that Binance revealed its plans to convert USDC to BUSD.

That said, several cryptocurrency companies and investors are dealing with the aftermath of the FTX crash. For example, crypto venture capital firm Multicoin Capital lost nearly $1 billion in assets held on FTX. The extent of the damage in the cryptocurrency space and the massive outflow of assets and declines in value have left questions on everyone's mind. Many wonder if crypto is still alive or dead.

In any case, some analysts point out, perhaps there is still life and hope in the cryptocurrency market, which has had to deal with similar blows several times in the past. The collapse of Mt.Gox, for example, was an event that had a cascading effect on the cryptocurrency industry, as well as that of Terra. Yet, Bitcoin & co. have withstood the passing of the storms…

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Roberto Rais

A great cryptocurrency expert and a long time collaborator. He actively follows several specialized Blogs in the cryptocurrency sector as Editors

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