Exchanges are currently seeing a mass exodus with more than 59,000 bitcoin, worth about $1 billion, withdrawn from Binance.
Coinbase, as one of the oldest and the biggest, had even more withdrawn, 69,000 bitcoin worth $1.15 billion.
Gemini, Kraken, OKEx and ByBit had about 45,000 bitcoin withdrawn in combination. Bitfinex, in contrast, saw an increase of 5,700 bitcoin. Huobi likewise saw a small increase, as did Bitstamp.
This exodus over the past week had 170,000 bitcoin withdrawn in total from exchanges, worth about $3 billion.
At the same time, balances onchain have increased across the board according to blockchain analysis.
Addresses holding less than one bitcoin have seen an overall increase of 33,700 bitcoin with these so called ‘shrimps’ now having $560 million more proofs of keys.
Those holding between one and ten bitcoins saw an increase of 48,700 while those with 10 – 1,000 saw an increase of 78,000 bitcoin.
To further prove this is individuals withdrawing to their own wallets, addresses with more than 1,000 bitcoin – which tend to be exchanges and other intermediaries – saw an increase of only 3,600 BTC.
This is one of the biggest withdrawal of bitcoin from exchanges following the bankruptcy of FTX which once again emphasizes the 2014 slogan of ‘not your keys, not your crypto.’
Eth withdrawals have also spiked considerably. 1.6 million worth of ethereum left exchanges in the past week, that’s worth about $2 billion.
Rather than a market consolidation, the downfall of FTX may instead lead to an onchain consolidation, at least for some time, as pretty much all exchanges see customers leave at peak rates.
Crypto.com for example saw 90,000 transactions on their hot wallet, significantly up from the usual 6,000 transactions a day.
All exchanges are therefore going through some testing times as the market demands reassurance and even guarantees in regards to reserves.
Usually this has led to competition on security, with Kraken’s tagline from 2014 of ‘Crypto’s Fort Knox’ being the most memorable.
What exactly will come out of this wave remains to be seen, but at the very least even newer cryptonians will now require higher standards.