Following FTX’s collapse, the entire cryptocurrency sector is seeing significant losses.
Exchanges were ultimately the companies most affected by this crash. The fallout from the collapse of one of the industry’s most popular companies was so big that the damages are spilling out to its competitors.
On top of that, accusations of FTX regarding negligence severely changed the public’s perception of these types of companies. Suspicions grew about the way exchanges run their businesses, and investors are now more than ever choosing to keep their digital assets in their safer personal wallets.
Ultimately, this resulted in the largest flee of capital from exchanges at a rate previously unseen.
One of the biggest losers that weren’t directly attached to FTX is its rival exchange, Coinbase.
This week, Coinbase reported one of the largest Bitcoin withdrawals in its history.
In total, 100 thousand BTC was withdrawn from the exchange. Half of that amount was removed from the Exchanges on November 24, and the other half was removed from the exchange’s funds the next day.
To sum it up, over $1.5 billion worth of bitcoin left Coinbase, in the extend of 2 days.
Other Exchanges Also Seeing The Effects
According to the analysis firm Glassnode, bitcoin outflow from crypto exchanges is at an all-time high.
In the six months following FTX’s demise, a total of 254 thousand BTC older than six months had been spent, representing around 1.3% of the circulating supply.
BTC is leaving exchanges at a rate of minus $2.8 billion per month, surpassing the previous peak set after the June 2022 sell-off.
The 24-hour volume decrease in exchanges is also notably lower. Binance’s weekly volume is down by 10.26%, Coinbase’s by 10.35% and Kraken went down by an astounding 22.59%.
Meanwhile, cryptocurrency lender BlockFi Inc. is expected to file for bankruptcy within days, according to anonymous sources.
The world’s largest exchange, Binance, announced a new “industry recovery fund”, in order to protect smaller crypto-related projects from the crash caused by FTX’s collapse.
