crypto investors panic and exit exchanges

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It’s panic in the cryptocurrency world. After the fall of FTX, millions of investors withdraw their bitcoins from exchanges. Crypto.com is one of the exchanges most affected by this exodus.



The abrupt collapse of FTX has made a deep impression undermined investor confidence on trading platforms. Indeed, during the bankruptcy filing, it was revealed that Sam Bankman-Fried, CEO of FTX, used his clientele’s money to fund his trading company, Alameda Research. This mismanagement of funds has led to the disappearance of over a billion dollars entrusted by FTX users.

Also Read: Leader Binance has a plan to save the cryptocurrency industry
Bitcoins leave platforms and are not resold


Marked by the sudden fall of the stock market, many investors began to do so withdraw their cryptocurrency exchange platforms in recent days. Mass withdrawals on the blockchain were noticed as early as November 7, 2022, at the onset of one of the industry’s biggest crises.

It is mainly the holders of bitcoins who have fled the centralized services. According to blockchain analytics firm CryptoQuant, bitcoin withdrawals saw a sharp spike on November 9, when Binance withdrew its buyout offer. That day, over 168,000 bitcoins left the exchange platforms. Same story on the part of the owners of Ether, the cryptocurrency of the Ethereum blockchain. When Binance left FTX on the brink, more than 1.3 million Ether left the platforms’ addresses.

As CryptoQuant points out, investors have created individual wallet addresses to hold their bitcoins. When cryptocurrencies left the exchanges, a large number of blockchain addresses appeared. Glassnode, another blockchain company, agrees. In its reports, the company indicates that this strategy involves both small and large bitcoin holders. Find these the security of self-sufficiency”continues Glassnode.

The platforms have seen one of the largest declines in total BTC balances in history. This compares to just three periods in the past; April 2020 (Editor’s Note: The Covid-19 Crash)November 2020 and from June to July 2022 »points to Glassnode.
For CryptoQuant, this can be interpreted as ” an intention to hold Bitcoin… as part of a long-term investment perspective Despite the crypto crash, it seems that holders are are willing to keep their bitcoins. These were not mass resold for fiat currencies, such as the euro or the dollar. Investor confidence in Bitcoin remains intact.

At the same time, withdrawals of stablecoins, these tokens linked to a fiat currency, have also increased. According to CryptoQuant, these are usually BUSD recordings, Binance’s stablecoin, which have soared. This is a historical record.

Stablecoin withdrawal transactions are increasing, purchasing power is decreasing
by means of @mignoletkr

Link
👇

— CryptoQuant.com (@cryptoquant_com) November 15, 2022
Panic among Crypto.com customers


Some exchange platforms are particularly let down by their customers. This is the case with Crypto.com. After the Singapore-based company accidentally sent $400 million worth of cryptocurrencies to an address on the Gate.io platform, it has left its customers worried. Moreover, Ki Young Ju, the CEO of CryptoQuant, noticed that the company’s stablecoin reserves have shrunk by 90% in seven months. Crypto.com would only have $292 million worth of stablecoins left.

Reserve ETH & stablecoins at https://t.co/FmNiPK88vZ:

• 25-80% of ETH reserve moved four times since September 2022.

• Stablecoins reserve dropped from $2.9 billion to $292 million, -90% in the last 7 months.https://t.co/sljiJZbXuv pic.twitter.com/UiVw0a0Nmw

— Ki Young Ju (@ki_young_ju) November 14, 2022
Changpeng Zhao, the boss of Binance, has made matters worse by repeatedly insinuating that depositing money on Crypto.com is risky. During a Space on Twitter, he openly suggested that his competitor is bankrupt.

These factors caused a movement of panic analogous to that experienced by FTX a week earlier. Massive withdrawals of Crypto.com have been spotted on the network in recent days. On Twitter, many influencers advise their followers to leave the stock market as a precaution. For some internet users, Crypto.com would be in a situation similar to that of FTX. In this context, the price of the CRO token issued by the exchange has stalled.

cro course

CoinMarketCap

To stop the bleeding, Kris Marszalek, CEO of Crypto.com, took to social media. He assures that Crypto.com is operating completely normally, despite numerous transfer requests. The company has no plans to freeze withdrawals.

“The withdrawal queue has decreased by 98% in the last 24 hours. Business is business as usual at Crypto.com. Kudos to our team for building a resilient blockchain infrastructure – functioning normally under pressure”says Kris Marszalek.
Determined to put out the fire, Crypto.com has published a list of addresses in its possession. This list of wallets only representspart of its reserves, emphasizes Kris Marszalek. Currently, a more extensive treasury audit is performed by a third party. The analysis will be available shortly.

The withdrawal queue is down 98% in the last 24 hours.

It remains business as usual at https://t.co/pFc4Pz9nFR.

Kudos to our team who built resilient blockchain infrastructure – operating normally under load.

Further!

— Kris | crypto.com (@kris) November 14, 2022
Who benefits from the cryptocurrency exodus?


As we can see on Twitter, some deserters repatriate their money to cold storage keys, such as a Ledger key. This tool makes it possible to secure cryptocurrencies stored on the blockchain. During the collapse of FTX, the French unicorn Ledger saw an influx of new users.

“After the FTX earthquake, there was a massive exodus from exchanges to security and self-sovereignty solutions. We are seeing heavy usage of our platforms and experienced some scalability issues tonight”said Charles Guillemet, head of security at Ledger, as of Nov. 10.
This wave of customers even resulted in a short server outage. Apparently, the number of new customers remained strong for several days. On November 14, Ledger’s support account was mentioned after all ” increased interest » for branded products.

After the FTX earthquake there is a huge outflow of exchanges to @ledger solutions for security and self-sovereignty
✊

We’re seeing massive adoption of our platforms and had a few scalability challenges this night. It should now be resolved. https://t.co/a1Le91tNZF

—Charles Guillemet (@P3b7_) November 10, 2022
The same observation for its direct competitor, Trezor. The hardware wallet specialist claims to have registered an explosion in sales, Cointelegraph reports. The brand points out that it currently sells more keys than it did in November 2021, when Bitcoin broke its all-time high. The surge in demand started last week with the outbreak of the FTX crisis.

“ We expect this trend to continue in the short to medium term as FTX failures are contagious. Bitcoin or cryptocurrency holders then lose faith in managers and finally begin to explore their options to self-manage their digital assets.says Trezor.
Source :

CryptoQuant
 
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