Bitcoin Exchange online streams hit record outflows of over $91,000BTC
Following the collapse of FTX on November 8, centralized exchanges experienced a series of outflows as investors become concerned about the safety of their deposits on these platforms. In November, the BTC net flow recorded the largest negative flow in its history, with a net flow of -91,363 BTC, worth over $1.6 billion.
According to CryptoCompare’s latest Exchange Review report, a total of 91,363 BTC were withdrawn from cryptocurrency trading platforms last month due to the collapse of FTX. Users are moving to custody of their own funds in an attempt to avoid losses linked to centralized third parties going down, as lenders Celsius and BlockFi also halted withdrawals before they went bankrupt.
The report notes that cryptocurrency exchanges have taken several measures to establish trust and credibility with users, including issuing Proof of Reserves audits. Notably, as CryptoGlobe reported, after Binance’s report failed to quell concerns, the exchange saw an outflow of $3 billion in just 24 hours.
CryptoCompare’s report also describes that after confidence in centralized exchanges took a hit, users migrated their assets and trading activity to more reputable and established platforms that are considered safer. As a result, Binance’s share of the market rose to 52.9%, its highest ever, after spot trading activity rose 29.5% to $506 billion and derivatives volume jumped 19% to $1.45 trillion.
The exchange also recorded its highest market share in the derivatives trading markets with a dominance of 67.2%. This consolidation of trading volume on Binance could raise new concerns for an industry that promotes decentralization, the report said.
According to the report, trading activity across crypto markets hit recent highs last month, with spot and derivatives trading on centralized exchanges rising 13.7% and 10.1% to $1.06 trillion and $1.44 trillion, respectively. This was the largest volume recorded for the spot and derivatives markets since September.
On November 8, the insolvency of FTX was confirmed and Binance announced its intention to purchase the distressed exchange. Total spot trading volume on centralized exchanges reached $90.1 billion on the day, the highest spot trading volume recorded since June. On the same day, total derivatives trading volume reached $297 billion, the second largest derivatives trading day in the history of digital assets, second only to May 19, 2021, when $384 billion was traded.
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