Bitcoins Worth $3 Billion Left Exchanges Amid Concerns About FTX Contagion

• by Artem
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• November 14, 2022
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• Bitcoin News

With approximately $3 billion in bitcoin removed from exchanges in the last seven days, bitcoin investors are withdrawing money at a rate not seen since April 2021. According to recent statistics from on-chain analytics company Glassnode, there were around 90,000 wallets accepting Bitcoin from exchange addresses on November 9.

Exchange customers’ worries about the security of their cash have grown due to the continuous commotion around the bankruptcy of important exchange FTX. Regulators are stepping up their monitoring of the cryptocurrency business as commentators have increased advice to avoid custodial wallets and seize ownership of one’s cryptoassets. On-chain data suggests that many holders have chosen non-custodial wallets during the past week.

On November 9, there was a sharp increase in the number of withdrawal addresses, exceeding the daily highs for both May and June of this year, the last time there was significant downward pressure on BTC price movement. Withdrawing addresses reached over 70,000 as of Nov. 12, the latest day for which data is available. The same data provides an hourly average of more than 3,000 withdrawal addresses in seven days (to November 13). The figures are consistent with what seems to be a sharp decline in Bitcoin reserves on the biggest trading platforms.

According to data from fellow on-chain analytics site CryptoQuant, the total exchange reserves are at their lowest level since February 2018, despite the pace of the slide suggesting that it may be impossible to establish the current real balance tally. Thirty-eight exchanges are tracked by CryptoQuant, including ones with known financial issues like FTX and Kucoin.

Another chart from Coinglass showed 177,000 BTC in weekly withdrawals until November 13; the current exchange rate amounts to over $3 billion in dollars. However, Huobi, Gate.io, and Crypto.com were singled out by Glassnode senior analyst Checkmate as having “particularly weird” Bitcoin balance readouts.

Concluding a dedicated thread into the discussion, he said, “Exchange balances are best estimate based on wallet clustering. They are more likely to be a lower bound than an overestimate.” He further stated, “These fund flows between exchanges include both real customers + FTX/Alameda. Hard to separate, thus looking as relative-to-balance.”

Michal van de Poppe, founder and CEO of trading company Eight, predicted how the present situation may develop and stated that the worst was probably not yet over. He told Twitter followers during the weekend that they’ll probably have more problems with exchanges in the next few weeks, but most of that would be gossip.