Cryptocurrency

Stablecoin reserves in centralized exchanges continue to fall after FTX collapse

Hull Invest

Gradually, the strength and popularity of stablecoins are growing alongside the cryptocurrency industry. Its growth is attributed to the stability it offers against cryptocurrency volatility.

USDT is still the largest stablecoin by market capitalization as USDC, Binance USD and DAI make up the top four at the moment.

Notable stablecoins after FTX collapse

The entire stablecoin sector has a market capitalization of $138 billion. coin market capitalizationThe Big 4 stablecoins contribute over $130 billion to this figure and dominate the stablecoin market. Despite their growth and popularity, very few stablecoins exist on cryptocurrency exchanges.

There are currently about 37 billion stablecoins hold In reserves of cryptocurrency exchanges. Binance is the biggest contributor to this figure, with around $24 billion in stablecoins in its reserves. Coinbase has over $973 million, Huobi has $709 million, Bitfinex has $145 million, Gemini has $98 million and Gate.io has $78 million.

Centralized Exchange Stablecoin Balance (Source: Glassnode)

Approximately 3.93 billion stablecoins have left exchanges in the last 30 days due to market uncertainty and low trust in centralized exchanges after the FTX collapse.

USDT enjoys a more stable presence among cryptocurrency exchanges, even as the crypto winter unfolds. Since August 2022, USDT has been largely flat at $18 billion as crypto exchange reserves.

USDT Balances on Exchanges (Source: Glassnode)

USDC, on the other hand, has seen some growth while trying to curb USDT’s dominance in the stablecoin market. The amount of USDC included has doubled to $5 billion.

USDC Balances on Exchanges (Source: Glassnode)

However, the resilience the stablecoin sector has enjoyed since the collapse of the Terra Algorithm stablecoin UST is somewhat under threat.Followed by Presentation The token suffered a significant drop as Huobi Global delisted the HUSD stablecoin.

Shortly after the announcement, the stablecoin fell 72% from its dollar peg, with HUSD currently trading at 13 cents. In a sharp drop, his HUSD amount in cryptocurrency exchange reserves is about to surpass his $65 million all-time low.

HUSD Balance on Exchanges (Source: Glassnode)

Centralized Exchange Stablecoin Reserves

After the demise of FTX, investors began to question the credibility of centralized exchanges. As of January 12, Binance has recorded approximately $5.22 billion in stablecoin outflows since the collapse of FTX.

Binance stablecoin balance (Source: CryptoQuant)

Similarly, within two months of the demise of FTX, Coinbase Pro had $690 million, Huobi $277 million, Bitfinex $125 million, Gemini $398 million, Gate.io There was a net outflow of $42 million.

On the positive side, OKX did not record a loss. Instead, the cryptocurrency exchange enjoyed a net inflow of $43 million.

OKX Stablecoin Reserve (Source: CryptoQuant)

During this period, cryptocurrency exchanges witnessed a net outflow of around $6.2 billion in stablecoins, saying Binance suffered the most. cryptoquantHowever, Binance held approximately $39.9 billion worth of stablecoins, so the outflow is not considered significant. report From November 10th

Exchanges such as Binance and Crypto.com released proof-of-booking with Mazars in November to establish user trust. Still, the company later faced backlash from the community for claiming the report did not reveal the exchange’s full reserves.

As a grim result, Binance witnessed a massive withdrawal of stablecoins worth around $2.1 billion in less than a day.

It is clear from the chart that users still have trust issues with centralized exchanges as stablecoin reserves continue to dwindle.

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