CryptoQuant, a leading data analytics firm, recently examined the impact of regulatory scrutiny and FUD on Binance, one of the largest cryptocurrency exchanges. The firm analyzed the net outflows of Bitcoin, Ethereum, and stablecoins during three distinct stress-test periods over the last five months.
The first stress-test period occurred in November 2022, when FTX collapsed, leading to regulatory FUD. During this time, there was a net flow of 40,353 BTC, equivalent to $660 million, and a total net flow of 78,744 BTC, or $1.3 billion, in a week. In contrast, the highest net flow of ETH was only $33 million.
The second stress-test period occurred in February 2023, triggered by an announcement from Paxos, the issuer of Binance USD stablecoin. This led to a net withdrawal of 5,027 BTC, equivalent to about $110 million.
The most recent stress-test period was due to the Commodity Futures Trading Commission’s (CFTC) lawsuit against Binance. During this period, Binance experienced a daily net flow of 4,505 BTC, approximately $125 million. However, the net flow of ETH was significantly higher at $137 million.
Despite these stress-test periods, Binance’s reserves of BTC and ETH have remained healthy. According to CryptoQuant, BTC reserves grew from 509k in December to 581k, while ETH reserves stand at 4.48 million, compared to a low of 4.42 million in late 2022.
Interestingly, Binance’s net flows of stablecoins decreased remarkably from $24.5 billion in December 2022 to only $10.7 billion in March 2023.
