The impact of FUDs and regulatory scrutiny on the Binance crypto exchange has been studied by leading data analytics firm CryptoQuant, which examined the net outflows of Bitcoin (BTC), Ethereum (ETH), and stablecoins during three distinct stress-test periods in the last five months.
Binance Exchange's Health After the CFTC Lawsuit
— CryptoQuant.com (@cryptoquant_com) March 30, 2023
CQ's research team assessed the behavior of Binance net-outflows and reserves of $BTC, $ETH, and Stablecoins in three recent stress-test periods.
- Regulatory FUD after FTX Collapse
- Paxos' announcement
- CFTC lawsuit
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As CryptoQuant stated, the first stress-test period occurred as a result of regulatory FUD following the collapse of FTX in November, resulting in a net flow of 40,353 BTC in one day, equivalent to $660 million, and a total net flow of 78,744 BTC, or $1.3 billion, in a week. The highest net flow of ETH, on the other hand, was only $33 million.
An announcement from Paxos, the issuer of the Binance USD stablecoin, triggered the second stress-test period in February. It resulted in a net withdrawal of 5,027 BTC, or approximately $110 million, in a single day.
The most recent Commodity Futures Trading Commission (CFTC) lawsuit, Binance had a daily net flow of 4,505 BTC, or approximately $125 million. The net follow of ETH, on the other hand, was significantly higher, at $137 million.
Surprisingly, Binance's net stablecoin flows decreased dramatically from $24.5 billion in December 2022 to only $10.7 billion in March. Despite these stress tests, Binance's BTC and ETH reserves have remained healthy, according to CryptoQuant.
Furthermore, according to the report, BTC reserves have increased from 509k in December to 581k, while ETH reserves are at 4.48 million, up from a low of 4.42 million in late 2022.
