$3 Billion In Bitcoin Left Crypto Exchanges Amid FTX Fallout

November 13, 2022 11:55 am Comments

Right now, it seems many investors are becoming more cautious about storing their crypto on exchanges after the fallout of major crypto exchange FTX.

So far, BTC investors have withdrawn around nearly $3 billion in Bitcoin in the last week which was the highest rate that the industry has seen since April 2021.

Analytics firm Glassnode also provided more concreate data which showed that there have been nearly 90,000 off-exchange wallets that have received Bitcoin since November 9.

As a result of the new fears of whether or not their assets will be safe on exchanges, speculators also believe that this may spur new regulation due to investors being concerned about security.

CoinTelegraph reports:

Amid ongoing turmoil over the bankruptcy of major exchange FTX, concerns have heightened among exchange users over security of funds.

Commentators have upped advice to avoid custodial wallets and take control of cryptoassets, and regulators are increasing scrutiny of the crypto industry en masse.

On-chain figures suggest that a large number of hodlers have opted for non-custodial wallets over the past week.

The number of withdrawing addresses saw a huge spike on Nov. 9, this surpassing the daily highs for both May and June this year when BTC price action last saw significant downside pressure.

For Nov. 12, the latest date for which data is available, withdrawing addresses still totaled over 70,000.

The same Glassnode data gives an hourly average of over 3,000 withdrawing addresses over the seven days to Nov. 13.

Based on the recent trend, it seems that self-custody of the crypto seems to be the safest way to go right now, especially if a large amount of assets are being stored.

Whether or not there are other crypto exchanges that have financial problems is also another thing to discuss as there is a firm called CryptoQuant that tracks matters such as these.

According to this firm, it is tracking around 38 exchanges which includes exchanges like FTX and Kucoin and it seems financial problems are quite common.

Things like “weird” Bitcoin balance payouts are things that are noticed at companies like Huobi, Gate.io, and Crypto.com.

Therefore, it is always advisable to proceed with caution if dealing with such exchanges.

CoinTelegraph concludes:

Concluding a dedicated thread into the topic, he noted that “Exchange balances are best estimate based on wallet clustering. They are more likely to be a lower bound than an overestimate.”

“These fund flows between exchanges include both real customers + FTX/Alameda. Hard to separate, thus looking as relative-to-balance,” he added.

Forecasting how the current scenario may play out, Michaël van de Poppe, founder and CEO of trading firm Eight, meanwhile said that the worst was likely not yet over.

“Probably we’ll have more issues with exchanges coming weeks, but probably also a ton of gossip,” he told Twitter followers at the weekend.

“Stay safe, be calm and don’t make emotional decisions. We’re in terrible territories, but crypto will come out of this stronger.”
BTC/USD was trading at around $16,500 at the time of writing, data from Cointelegraph Markets Pro and TradingView showed.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.