Recent analysis shows that crypto investors have begun withdrawing their digital assets from Binance’s crypto exchange in the last few weeks after the collapse of rival FTX. Despite assurances by Changpeng Zhao, CEO, that the crisis was under control, outflows continue to rise. Customers drew a net sum of 360 million dollars Friday. It seems that Binance, the largest digital asset exchange in the world, is having difficulty maintaining its holdings.
Binance amid Chaos
Investors’ skepticism is evident in the underperformance of Binance Coin (BNB), and Binance USD(BUSD) native tokens. In just over two months, the value of BNB dropped by 29%. BUSD, however, has lost its 6th rank to the XRP, due to a drop in market cap.

Advertisement

Nansen, a crypto data company, reported that Binance, the largest crypto exchange, had lost $3 billion in assets the week before. This is 4% of the company’s total assets at the time. After Zhao reversed the withdrawals from the Nansen article, the exchange lost almost 15%. In just two months, Binance’s assets had lost almost 25% of their value.
Continue reading: See the Top Crypto Telegram Channels of 2023
Trending Stories

Binance is also losing credibility and clout in other ways. Despite the exchange’s overall value dropping by 24% since November 2017, investors’ holdings in popular tokens such as MATIC, APE and GALA have been reduced by 40% to 50%.
Binance’s Doubtful POR
CoinMarketCap reported a balance of $9.58 trillion BUSD on January 4. This was more than $3.5 billion less that the $13.1 billion or $13.2 billion announced by Nansen, Defillama. It reported that the portfolio allocation was BNB at 31.86%; BUSD at 19.15%; USDT at 16.73%; BTC at 9.87%, ETH at 7.16%, and USDT at 16.73%. The rest were attributed to the “Others” category.

Advertisement

Defillama data shows that the decrease in BUSD holdings was consistent with notable drops (at most $1 billion) on December 25 and December 14, the latter day being the day after CZ’s solace-inducing Tweet. The net loss of $3.46 billion in just one day after this second significant decrease in BUSD was shocking. USDT and USDC coins were simultaneously doubled on January 4, bringing the total USDT and USDC losses to $6.27 billion.
This disparity is indicative that there are trust issues with Binance. Given Binance’s prominence in crypto market, it’s reasonable for people to be concerned that these suspicions could grow if they do. Although Binance has not been the subject of much media attention or any significant market turmoil, it is possible that withdrawals will continue to rise at their current rate, which could have catastrophic consequences for digital assets and market participants.
Also read: Bitcoin (BTC), Price Back to $15,000 Before Rallying To $22K

About the author
Disclaimer

The content presented may contain the author’s personal opinion and is subject to market conditions. Before investing in cryptocurrency, do your market research. The publication or the author are not responsible for any financial loss.

Crypto Stories
View all