TokenAnalyst estimates that capital outflows from major crypto exchanges have exceeded inflows by ~$622 million over the past 5 days.
Blockchain data provider TokenAnalyst estimates that capital outflows from major crypto exchanges have exceeded inflows by ~$622 million over the past five days, Bloomberg reported on May 15.
London-based TokenAnalyst has reportedly based its figure on an analysis of withdrawals and capital inflows on multiple crypto trading platforms — including Bitfinex, BitMEX, Binance and Kraken.
While bitcoin (BTC) continues to rally and hit multi-month highs, Bloomberg’s report also makes the claim that its strong price performance may in part be inflated by recent capital flight from investors unsettled by the spate of controversies affecting crypto exchange Bitfinex and affiliated USD stablecoin issuer Tether.
As reported, the New York Attorney General’s office (NY OAG) has recently accused Bitfinex of having lost $850 million in user deposits, and secretly covering up the shortfall using funds from Tether — the latter of which has itself come under renewed criticism for being backed only 74% by USD reserves. Both companies have rebuffed the allegations and have contested the NY OAG’s injunction order.
Bloomberg further cites TokenAnalyst’s data, which reportedly reveals that Bitfinex has had net outflows of over $1.7 billion in bitcoin and ether (ETH) since April 26 — the date of the NY OAG’s court filings. It also claims that bitcoin traded at a premium of as high as 6% in the controversy’s fallout — even as other coins saw losses given tether’s (USDT) prevalence as an intermediary asset throughout markets.
Bloomberg states that the premium broke this week, after reports that Bitfinex had successfully raised $1 billion in fresh investment via a private token sale of new native exchange LEO tokens.
John Griffin — a finance professor at the University of Texas at Austin — told Bloomberg that “since Tether is insufficiently backed, it means that some of the reserves backing customer assets on exchanges are likely insufficient.” He thus noted that:
“Smart customers will not custody their funds on exchanges and pull their crypto off exchanges. This could put further upward pressure on Bitcoin prices as one would rather take fake money and exchange it to Bitcoin.”
As previously reported, Professor Griffin was one of the co-authors of a high-profile study of tether’s alleged role in manipulative market practices, publishing a paper in June 2018 that claimed tether was being “used to provide price support and manipulate cryptocurrency prices” — artificially deflating the price of bitcoin to maximize short-term returns on futures contracts.
Source: , CoinTelegraph
Articles listed with Cash Tech News as the author are either general information, or may have been imported from another website, to bring our readers a rich media experience that encompasses articles that we find interesting, as well as those curated by others.
The views and opinions expressed here are for informational purposes only, and should not be confused with professional financial advice. These opinions are solely those of the author and do not necessarily reflect the views of CashTechNews.com. Every investment and trade involves risk. You should conduct your own research, and contact your professional financial advisor before making any investment.
Corrections, feedback, and ideas should be submitted through the website contact form.