Binance saw a total net outflow of over $3.6 billion in the past week as crypto firms and users pulled out funds.
• This is the highest amount of one-day withdrawals since June, according to Nansen data.
• Binance’s international arm saw over $8.78 billion leave its exchange and $5.1 billion in incoming funds, meaning the exchange faced a net outflow of roughly $3.66 billion.
• Web3 investment firm Jump Crypto is among the entities that removed funds from Binance, according to Nansen data — on Ethereum, Jump withdrew about $18.4 million this week and pulled about $123 million from Binance last week..
• In response to the news, Binance CEO Changpeng “CZ” Zhao said that it’s just “business as usual” and explained that USDC withdrawals on Binance US had been temporarily paused due to a token swap issue where the exchange was unable to convert funds due to a New York bank — the liquidity provider for the swap — being closed but have since resumed
Binance’s Net Outflow
Last week saw an exodus of funds from the popular crypto exchange Binance, as users and firms pulled out a total net amount of more than $3.6 billion in just seven days. This unexpected outflow has fueled speculation over what is driving the trend, especially considering that Binance had recently announced plans to expand its operations. Withdrawals from centralized exchanges are often seen as bearish signs reflecting a lack of faith in the current market conditions; at the same time, it could also be evidence of newfound bullishness with traders taking advantage of opportunities for higher profits elsewhere. Whatever the cause may be, investors will eagerly be awaiting any further details on what this sudden move could signify for the long-term outlook of Binance and the overall cryptocurrency markets.
The latest Nansen data revealed that this is the highest amount of one-day withdrawals since June. While these figures had been decreasing overall in recent months, they have now dramatically increased again and are sitting at a 48-month high. This illustrates a significant shift in consumer behaviors, potentially toward an economic recession although more data would be needed to confirm this. It is clear, however, that people’s attitudes toward their finances have changed over the past few months leading to an increase in daily spending and withdrawals. These changing trends will likely be monitored closely by economists over the coming days and weeks as more reliable long-term impacts become visible.
On Monday, December 12, Binance’s total daily withdrawal amount hit an all-time high since June 2020. This consists of $8.78 billion in withdrawals and $5.1 billion in incoming funds across its international arm alone. The cause of such a high net outflow can be attributed to a variety of factors, most notably the token swap issue with New York Bank that Binance CEO Changpeng Zhao discussed on Twitter.
Possible Investor Pulling Funds Due to Uncertainty Surrounding Crypto Market
In addition to this token swap issue mentioned above, there is also speculation that some investors may be pulling their funds due to uncertainty surrounding the cryptocurrency market in general. With the current state of affairs regarding cryptocurrencies being quite unpredictable — due both to fluctuations in prices and regulatory issues — many investors may simply be taking a “wait-and-see” approach until more clarity is provided by governments or industry leaders alike.
Other major crypto companies have begun to pull out as well, such as Jump Crypto. Jump Crypto is proving to be a shrewd investor in the cryptocurrency market by taking advantage of fluctuating conditions. According to data provided by Nansen, Jump withdrew significant funds from Binance this week and last as well. The company took out approximately $18.4 million this week and $123 million last week — showing a clear commitment to Ethereum instead. This clear shift in focus to Ethereum shows their confidence in its potential for long-term stability and growth, something that bodes well for both them and the wider future prospects of cryptocurrency. With the turbulent nature of cryptocurrencies likely here to stay, having experienced investors like Leap Crypto on board is essential for the eventual establishment of crypto markets as a lasting alternative form of finance or investment.