The CEO of on-chain analytical service CryptoQuant dived into the biggest exchange's holdings to find out if the exchange is solvent, resilient and ready for another large wave of outflows. Here are the results.
According to the on-chain analyst, despite the drop in Bitcoin reserves over the last two days, Binance's holdings increased by 24% since the FTX bank run last month. The outflows wave we have been witnessing on Ethereum since November does not seem to have any significant effect on the exchange's reserves. On the contrary, the number of ETH on the exchange's wallets is on the rise.
People are asking me if @binance is fine.
— Ki Young Ju (@ki_young_ju) December 13, 2022
Their $BTC reserve dropped -8% over the last two days but +24% up during the FTX bank run last month.
There might be things to be clarified for regulation, but I don't see any shady on-chain activities for now.https://t.co/66yVQG2idc pic.twitter.com/gK8iJmCZxQ
The same story applies to Bitcoin holdings. The amounts of digital gold on exchanges are at comfortable levels, which reflects the fact that Binance has not been forced to sell some of their liquid assets in exchange for liquidity.
According to the portfolio compiled by Nansen, Binance's portfolio is worth around $60 billion, but it does not mean that the exchange is able to cover an unreal $60 billion withdrawal spike.
The value of liquid assets held on an exchange that can be used in case of an emergency remains at approximately $20 billion. With around $2 billion of withdrawals, Binance should not feel any noteworthy pressure that investors might affect withdrawal operations or the exchange's operational availability.
According to the aforementioned facts, Binance does not seem to have any issues with liquidity or funds storing. The exchange will easily take a few more waves similar in size to what we saw two days ago and will most likely have no need to sell its reserves. However, numerous crypto enthusiasts and experts urged users to withdraw their holdings from the trading platform if they are worried about their safety.
Alex Dovbnya
Denys Serhiichuk