Are cryptocurrencies really dead? Here’s what the stock market releases reveal

The FTX contagion spread fairly quickly to all cryptocurrency exchanges and investors opted for a self-depository solution. There have been massive outflows of bitcoins and stablecoins from exchanges following the fall of FTX.

According to data from Glassnode, the speed of Bitcoin exit from exchanges is so high that all BTC that has flowed into exchanges since 2018 has now been withdrawn. The demand for self-deposited and spot-based bitcoin marketplaces is growing rapidly. Although the bitcoin has gone through several bear markets in the past, this type of behavior is unprecedented.

Besides bitcoin, the last week has seen a massive outflow from popular stablecoin exchanges like BUSD and USDC. All these stablecoins were transferred in large numbers to the auto-custodian. In its recent report, the data provider on-chain Santiment written :

The start of the year was quite positive as we saw the influx of major stablecoins (USDC, BUSD, USDT) in the cryptocurrency market, suggesting that new money is coming in to possibly buy the bottom (as prices were down). The market capitalization of the major stables eventually peaked at $134.07 billion around the same time that BTC and ETH peaked this year. Since then, the trend has been downward, accelerated by the announcement of the first 75 basis point hike in the EDF in June.

In addition, there has been a massive reshuffling of holdings in stablecoins since Binance announced that they will convert USDC stablecoins to BUSD. “If there’s one major lesson that recent events have taught us, it’s self-defense. The market is learning fast, as we have seen huge off-exchange supply spikes for USDC and BUSD recently “, notes Santiment.

Is Crypto Really Dead?

Contagion FTX spread quite quickly and several players in the crypto space were heavily impacted. Crypto venture fund Multcoin Capital has faced losses in the $1 billion range by holding its assets on FTX.

The way the crypto market crashed has led many to wonder if crypto is really dead. However, cases like FTX have happened in the past, with exchanges like Mt. Gox collapsing overnight.

The fact that people are opting for treasury instead of selling their coins shows that they continue to believe in good crypto projects, blockchain and the concept of decentralization. However, there have certainly been some short-term headwinds, such as institutional players selling off their BTC after the collapse of FTX, but it would be too early to tell if the crypto is truly dead at this point. At $800 billion, it’s still a sizeable market.

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