According to data from analytics company, CryptoQuant, FTX exchange’s Ethereum reserves have declined to a new all-time low in the past two years. This news is coming amid the heated war between Binance and FTX.
Presently, the company’s vault has about 108246.43 ETH. Moreover, Ethereum reserves have dipped by nearly 300,000 in the past two days.
Meanwhile, FTX is not the only crypto exchange witnessing such massive declines. Other crypto exchanges have recorded similar decreases in their ETH reserves.
One major cause for the recent drop is the coin’s supply shock. This shock has been dropping since the ongoing bearish crypto market. However, other factors must have contributed to the decline other than supply shock.
Furthermore, the FTX exchange has been facing a difficult time lately. A vast reserve is suitable for a crypto exchange because it means the exchange has enough liquidity to conduct massive transactions.
Changpeng Zhao, the CEO of Binance, announced on Twitter over the weekend that Binance is ending its alliance with the FTX exchange.
Hence, Binance plans to liquidate all FTX’s FTT tokens on its platform. This is coming after Binance decided to exit an equity investment it has had in FTX since 2019.
According to Zhao, FTX bought all of Binance’s shares in the company. As a result, FTX paid Binance over $2.1 billion in BUSD and FTT.
FTX Witness Huge Stablecoins Withdrawal
Zhao’s declaration comes after allegations regarding the financial woes of Sam Bankman-Fried’s Alameda Research. The CEO stated that the size of the liquidation would be enormous.
Hence, it would spread the liquidation over a few months. This would reduce any impact it might have on the price of FTT.
“The crypto exchange will conduct the liquidation slowly. The aim is to reduce its impact on the crypto market. However, this might take a couple of months because of limited liquidity and current market conditions,” CZ stated.
Per Nansen’s statistics, the FTX exchange is witnessing a massive surge in exchange withdrawals. In the last week, over $292 million worth of stablecoins has left the exchange.
Traders are exiting the exchange platform because of huge fears over liquidity. This is because Alameda is a significant market maker on the US-based crypto exchange.
Meanwhile, leading cryptocurrencies, Bitcoin and Ethereum, are trading in a tight range. Hence, the likelihood of a significant liquidity crisis on exchanges is unfounded.
Instead, the recent decline indicates symptoms of fear and not greed.
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