FTX Collapse Causes Over 80,000 Bitcoin To Leave Exchanges
Due to the liquidity crisis, many users have sold their tokens out of fear of a worse decline, while others have moved their assets off exchanges.
The failure of FTX has dramatically damaged investor trust in centralized crypto exchanges. The golden rule of crypto – “not your keys, not your coins” – has returned to the forefront of public conversation as a result of the ensuing financial instability and claims that a failing cryptocurrency exchange used user cash to support risky trades.
Giving up control over the currency of users has cost many a fortune. As a consequence, massive exchange withdrawals have been observed.
Over 80,000 BTC have left exchange wallets in the previous day, according to CryptoQuant. According to the statistics, investors are withdrawing their Bitcoin to keep them in locations other than an exchange.
The study reveals,
“FTX is insolvent and looking for a rescue; Binance may provide assistance. Time will tell whether this comes to fruition. Investors have since lost confidence in central exchanges. This is precisely shown on the Exchange Reserves and Exchange Netflow charts.”
CryptoQuant recorded far over 5 billion stablecoin outflows from exchanges, according to on-chain statistics. The numbers look to be the highest since June 15 when the volatility caused by the FTX drama increased.
In contrast, the number of transactions removing stablecoins from exchanges has soared to over 57,900, up from 7,010 a week ago. Following server disruptions, the hardware-based cryptocurrency wallet provider Ledger encountered “a few scaling difficulties” due to the large withdrawals from crypto exchanges.
Also Read: Bankman-Fried Resigns As CEO Of FTX, Bankruptcy Proceedings Start