Bitcoin exchange net flows hit record outflows of over $91,000 BTC

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After the collapse of FTX on November 8, centralized exchanges saw a series of exits as investors worried about the safety of their deposits on these platforms. In November, BTC net flows recorded the largest negative flow in its history, with a net flow of -91,363 BTC, worth over $1.6 billion.

According to the latest report from CryptoCompares Exchange Review, a total of 91,363 BTC were withdrawn from cryptocurrency trading platforms last month following the collapse of FTX. Users are turning to safekeeping their own funds in a bid to avoid the losses associated with the drop in centralized third parties, as lenders Celsius and BlockFi also halted withdrawals before going bankrupt.

Source: CryptoCompare

The report notes that cryptocurrency exchanges have taken several steps to establish trust and credibility with their users, including publishing proof-of-reserve audits. Notably, as CryptoGlobe reported, after Binances’ report failed to allay concerns, the exchange saw outflows surpassing $3 billion in just 24 hours.

The CryptoCompares report also details that after trust in centralized exchanges took a hit, users migrated their assets and trading activities to more reputable and established platforms deemed safer. As a result, Binances’ market share rose to 52.9%, its highest level ever, after its spot trading business increased by 29.5% to $506 billion and its derivatives volume jumped 19% to $1.45 trillion.

The exchange also recorded its highest market share in the derivatives trading markets with a dominance of 67.2%. This consolidation of trading volume on Binance could raise new concerns for an industry that promotes decentralization, the report says.

According to the report, trading activity in crypto markets hit recent highs last month, with spot trading and derivatives on centralized exchanges up 13.7% and 10.1% for reach $1.06 trillion and $1.44 trillion, respectively. This is the largest volume recorded in the cash and derivatives markets since September.

On November 8, FTX’s insolvency was confirmed and Binance announced its intention to acquire the struggling exchange. Total cash trading volume on the centralized exchanges reached $90.1 billion on the day, the highest spot trading volume since June. On the same day, total derivatives trading volume reached $297 billion, the second-largest derivatives trading day in digital asset history, just after May 19, 2021, in which $384 billion dollars were exchanged.

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