There has been a massive outflow of funds from exchanges as the industry regulatory uncertainties. This was revealed by Glassnode in a Twitter post. The data shows that Bitcoin witnessed an outflow just as Ethereum with the resulting net flow of both coins being in the negative.
The report states that three coins, Bitcoin, Ethereum and Tether all witnessed a net outflow $1.8 billion. It shows that Ethereum witnessed the largest outflow of $748 million. Bitcoin witnessed an outflow of $700 million as holders move funds away from exchanges.
An Inflow of Ethereum Tether
Even as the market shows a negative flow at the exchanges, the report shows that the only coin that has a positive flow is the Ethereum-based Tether stablecoin. This could indicate that the company behind it, Tether Holdings, may have minted more coins to balance short supply in the market.
It could also means that traders are using the stablecoin to purchase more coins that they are taking up position in. The Ether-based Tether witnessed an inflow of $353 million.
Why Traders Are Moving Away from Exchanges
There are indications that there is a massive outflow from the exchanges as holders seek to protect their funds from extreme regulation. In recent times, there have been moves by governments such as in the US, Canada and the EU to tighten regulatory oversight on cryptocurrencies. This could be the reason for the new outflow of coins from centralized exchanges.
📊 Daily On-Chain Exchange Flow#Bitcoin $BTC
➡️ $637.3M in
⬅️ $698.6M out
📉 Net flow: -$61.4M#Ethereum $ETH
➡️ $621.9M in
⬅️ $784.3M out
📉 Net flow: -$162.4M#Tether (ERC20) $USDT
➡️ $691.3M in
⬅️ $337.6M out
📈 Net flow: +$353.7Mhttps://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) March 20, 2022
Also, the situation in Ukraine has led to more intense scrutiny on cryptocurrencies, leading to warnings from industry leaders for people to take control of their digital assets. The Canadian protests was also an eye-opener to the reality that those who are not in control of their private keys are not in control of their funds as the country’s government froze crypto assets donated to the protesters.