A pointy drop in OKEx’s buying and selling quantity and stablecoin reserves – tether particularly – could reveal an ongoing exodus of its customers
A pointy drop in OKEx’s buying and selling quantity and stablecoin reserves – tether particularly – could reveal an ongoing exodus of its customers, after the favored crypto derivatives change unexpectedly halted all crypto withdrawal actions for about 5 weeks.
Knowledge from analytics service CryptoQuant exhibits that the quantity of tether held in OKEx wallets have dropped to six.69 million from 275.zero million between Nov. 25 and Dec. 1, down 97.6% in lower than every week. Malta-based change OKEx has a big person base in China and tether, the world’s largest dollar-backed token with complete property of $19.35 billion, is among the hottest stablecoins utilized by Chinese language merchants.
On the identical time, complete every day buying and selling quantity on OKEx has declined considerably throughout the identical time interval – down roughly 67.7%, respectively, from Nov. 25, in line with knowledge compiled by CoinDesk. The amount of tether traded on OKEx plunged 70%.
Merchants typically use stablecoins as an middleman step so as to purchase riskier crypto property. After people buy stablecoins with U.S. {dollars} or different government-issued currencies, exchanges are normally the platform the place the stablecoins go to be traded for cryptocurrencies reminiscent of bitcoin, ether or others.
The Chinese language authorities prohibited native crypto exchanges from permitting trades between crypto property and the Chinese language yuan in 2017, however folks can nonetheless commerce renminbi into stablecoins by way of over-the-counter (OTC) desks.
Steep drops
The collapse of buying and selling quantity doesn’t look like a mere lull in curiosity, particularly contemplating bitcoin is close to its all-time highs and different cryptocurrencies have been rallying.
The sudden and important decline in tether in reserves on OKEx may point out that customers are transferring their stablecoins elsewhere – presumably to a distinct change or to their personal chilly wallets, in line with analysts and merchants who spoke with CoinDesk.
“[It’s] simply people withdrawing I believe,” Darius Sit from Singapore-based QCP Capital informed CoinDesk. “They don’t wish to preserve property in OKEx.”
Chinese language customers’ alternate options to OKEx have additionally had related issues amid a latest authorities crackdown on exchanges.
Nevertheless, throughout the identical time interval, the tether reserve on Huobi logged a small enhance, in line with knowledge from CryptoQuant, though the identical metric dropped barely on Binance. Whereas legally primarily based in Seychelles, Huobi additionally focuses on China-based prospects, as does Binance, which isn’t clear on its location.
A spokesperson for OKEx mentioned CryptoQuant’s knowledge didn’t match the agency’s inside information however OKEx has but to offer their very own figures.
Nonetheless, knowledge from blockchain analytics agency Glassnode additionally exhibits {that a} substantial quantity of tether and different stablecoins have left the change prior to now week.
OKEx presently helps seven stablecoins on its platform: USDT, USDC, Dai, Paxos Normal (PAX), TUSD, USDK and GUSD.
In response to Glassnode knowledge, balances of USDC and PAX on OKEx have additionally dropped sharply prior to now week.
In a latest ask-me-anything (AMA) session, OKEx CEO Jay Hao mentioned the freeze of OKEx’s crypto withdrawals was dangerous for his firm and in consequence, buying and selling volumes have dropped.
“Now we have seen an comprehensible lower in buying and selling exercise on the change,” Hao mentioned.
Hao didn’t clarify why the backups of the crypto personal keys couldn’t be used in the course of the freeze. In response to OKEx, the suspension of all cryptocurrency withdrawals was resulting from one among its key holders being “out of contact” with the change after they had been “cooperating with a public safety bureau in investigations.”