Mainstay Crypto Exchanges Had Capital Outflows Over Inflows in Excess of $620 Million Recently
TokenAnalyst, a blockchain data provider, has estimated that the capital outflows have exceeded the inflows in over $622 million USD in the past five days. The company, which is based in London, has analyzed deposits and withdrawals from Kraken, Bitfinex, Binance and BitMEX in order to have these conclusions.
Bitcoin is rallying now and its price is currently over $8,000 USD. This may be the main reason why the outflows are going up. People bought BTC when it was cheap and now they have decided to cash out while they wait for the prices to go down again. It is a normal move when prices go up so suddenly.
According to Bloomberg, there is a chance that the current value of Bitcoin may be somewhat inflated due to a very strong performance recently. Several investors simply saw that the market was going up and are waiting to cash out soon, which may take prices slightly below what they are now in the future.
Another belief of experts is that the trouble with Tether may have been good for Bitcoin. People could have been drawn to the most powerful token in the market exactly because they lost their faith in Tether.
This happened after the New York Attorney General has accused Bitfinex of using $850 million USD that belonged to Tether in order to cover up some of the money lost by the company. Now, Tether would be backed only 74% by USD reserves, not 100% as it was before. Bloomberg affirmed that the Bitcoin premium was as high as 6% after the controversy fallout.
A professor at the University of Texas, Austin, John Griffin, has told Bloomberg that Tether was not sufficiently backed, which means that there were not enough reserves backing it. Smart customers, according to him, this could put upward pressure on Bitcoin.
Griffin can be considered an authority on Tether. Last year, he was responsible for a quite high-profile study which affirmed that Tether had a role in manipulating markets because of its price support and that it would artificially deflate the price of BTC.