$248M stablecoins flow out of Coinbase as community refutes exchange liquidity issues

Rumors surfaced Friday night time that Coinbase might face liquidity issues following leaked emails stating that it will droop its associates program. Business Insider reported that they obtained emails stating;

“This has not been a simple resolution, nor was it made frivolously, however, attributable to crypto market circumstances and the outlook for the rest of 2022, Coinbase is unable to proceed supporting incentivized site visitors to its platform.”

Some took to Twitter to assert the choice was indicative of liquidity issues for the highest US exchange. Kurt Wuckert Jr of CoinGeek tweeted that the suspension of the associates program, together with different selections made by Coinbase over the previous a number of weeks, signifies a “liquidity disaster” is looming.

Coinbase outflows

On July 15, round 50% of stablecoins on Coinbase Pro left the exchange, in line with on-chain information from CryptoQuant; the full worth got here to roughly $248 million. The proportion stablecoin outflow was considerably larger on Coinbase than on different exchanges such as Binance. Only round 1% of stablecoin reserves left Binance over the identical interval, however the tokens had an analogous worth at slightly below $300 million.

8M stablecoins flow out of Coinbase as community refutes exchange liquidity issues
Source: CryptoQuant Coinbase Stablecoin Reserves
binance stablecoin reserves
Source: CryptoQuant Binance Stablecoin Reserves

When the worth of stablecoins on the 2 exchanges is in contrast, the discount in stablecoins held on Coinbase contrasts with Binance. Stablecoins peaked at round $1.2 billion on Coinbase in January 2022, however now the worth stands at simply $284 million. On Binance, the worth stays in an upward pattern since 2019.

outflows
Source: CryptoQuant

The information paints a much less drastic however nonetheless worrying image when evaluating the Bitcoin held on every exchange. Coinbase has seen a gentle decline in Bitcoin in its reserves, whereas Binance has been rising throughout the identical interval.

btc outflows

When all exchanges tracked by CryptoQuant are included, the Coinbase graph seems to observe the general trade pattern. The downtrend in Bitcoin held on Coinbase could merely be following the elevated reputation of having crypto in non-custodial (unhosted) wallets.

exchange outflows

Community defends Coinbase

Amid rumors of a disaster at Coinbase, a number of trade professionals have referred to as out these suggesting the exchange is in hassle. Kraken’s Dan Held tweeted, “Coinbase doesn’t have a liquidity disaster,” whereas the developer accountable for the Coinbase associates program, NJ Skobene, confirmed this system’s removing was not a warning signal.

Jungle Inc, a crypto YouTube additionally tweeted that Coinbase has “$6 billion in money” and sizable crypto reserves. However, his confidence began and resulted in the identical publish as he confirmed he had eliminated all funds from the exchange. The threat of holding on exchanges could seem heightened after Voyager and Celsius already went into chapter 11 this yr.

On July 12, Brian Armstrong, Co-Founder of Coinbase, tweeted that the corporate is “nonetheless adjusting” to the expansion it obtained in 2021. Will this development result in the downfall of one of the world’s most trusted exchanges? If it did, it will undoubtedly have a knock-on impact on the remaining of the trade. Currently, Coinbase’s cost-cutting methods don’t appear excessive, given the drop within the value of Bitcoin since January.



https://cryptoslate.com/248m-stablecoins-flow-out-of-coinbase-as-community-refutes-exchange-liquidity-issues/

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