Users withdrew a net worth of $3.7 billion worth of bitcoin and $2.5 billion worth of ether in the last week of Nov. 6-13, according to CryptoQuant data cited by Bloomberg.
The saga began on Sunday, November 6, when a tweet from Binance CEO Changpeng Zhao, known as the CZ in the industry, questioned the power of Alameda Research, the trading firm affiliated with the Bankman-Fried exchange. The resulting panic among FTX.com investors became so intense that they collectively withdrew $430 million worth of Bitcoin from the three-year-old exchange in just four days. The company held more than 20,000 bitcoins as of Nov. 6, data from CryptoQuant shows. Those reserves had depleted to nearly zero by Wednesday, Nov. 9 due to concerns about FTX’s financial health. Binance’s proposal to take over the exchange and the subsequent cancellation of the offer has only accelerated the processes and turned the eyes of retail investors to all other exchanges and services for which there may be some risk of bankruptcy.
Last week was “arguably one of the darkest in cryptocurrency history,” Sasha Ivanov, founder of blockchain platform Waves, said in a public statement. “It is disheartening to see the value of this key technology diminish due to the collapse of what many considered a leading exchange. This is the latest and greatest failure of a centralized entity in the cryptocurrency industry and could spell the bitter end of the their existence. The foundation of cryptocurrency is decentralized blockchain technology, and I expect this recession to bring the industry’s attention back to those core values.”
As of last week, cryptocurrency exchanges such as OKX, KuCoin, Poloniex, and Huobi have pledged to increase transparency and share their so-called proof of reserve after Binance released a list of some of their portfolios and holdings on Thursday.
