Binance Sees Largest Bitcoin Withdrawal, 40K BTC Out
The largest crypto exchange in the world, Binance, has experienced the most significant Bitcoin withdrawal in its history, according to recent data. The company could be facing a bank run as crypto investor confidence continues to decline following the collapse of trading venue FTX and a US investigation into major crypto exchanges.
At the same time, positive economic data from the US has a positive effect on the market. Bitcoin is back above its previous yearly lows. At the time of writing, BTC’s price is trading at $17,750 with gains of 4% and 5% respectively over the last 24 hours and last week.
Bitcoin rally in danger, Binance takes a stand
Data from the analysis firm Glassnode in the chain, shared by Dylan LeClair, indicates that Binance has seen a massive withdrawal of 40,000 BTC in the last 24 hours. The outflows are almost double what was seen in July 2021.
At the time, the crypto market experienced another capitulation event after reaching an all-time high north of $60,000. The cryptocurrency lost over 50% of its value from May to the end of July.
In early November, the crypto exchange saw a significant outflow as FTX went up. However, the market seems more bearish on crypto exchanges now than at two of the worst sentiments, during the 2021 capitulation and the FTX collapse.
In addition, the crypto exchange has experienced its worst stablecoin outflow since its inception. Additional data from LeClair indicates that Binance has seen $2.1 billion in outflows in the past 24 hours. There are $20 billion in stablecoin reserves.
Overall, the exchange has enough funds to cover ten times its withdrawals, but market sentiment is negative and crypto investor confidence continues to decline. Changpeng “CZ” Zhao, CEO of Binance, welcome the withdrawals and classified them as “stress testing”:
We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us. I actually think it’s a good idea to “stress test tap” each CEX on a rotating basis.
Bitcoin exchanges are often a bullish indicator. In the current context, with falling inflation and a potential US Federal Reserve (Fed), perceptions around outflows have changed.
However, there is less Bitcoin on exchanges, regardless of market sentiment. The less BTC offers in these arenas, the more support for a market rally.
