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Bitcoin holders are skittish after the dramatic collapse of the FTX cryptocurrency exchange, according to blockchain analysts at Glassnode. Bitcoin (BTC) withdrawals have hit a record 106,000 per month, indicating that customers may be losing confidence in third-party services.
Glassnode tweeted that there had been three other periods in recent years with similar withdrawal patterns, April and November 2020 and June to July 2022, when combined factors — including the Russian invasion of Ukraine and the failure of the Terra LUNA stablecoin — rocked the crypto market. nose dive.
— glassnode (@glassnode) November 13, 2022
In the past, similar outflows have sometimes signaled a bull run. In this case, it’s much more likely to be a sign that investors have lost faith in big-name exchanges. As Markets Insider noted, these actions “suggest that crypto investors are rethinking how to manage their digital assets as the world’s third-largest crypto exchange has failed and the value of the fortune built by FTX founder Sam Bankman- Fried. [has] now wiped out to $1.”
Coin edition quoted Hong Kong Digital Asset Operations Manager Alan Wong, who said that after FTX “things will continue to simmer” and that with an $8 billion gap “between liabilities and assets, when FTX is insolvent it will create a domino effect which will lead to a series of investors associated with FTX going bankrupt or being forced to sell assets.”
Reuters reported Monday that FTX is under investigation by an alphabetical soup of agencies, including the US Department of Justice and the Securities and Exchange Commission. As of 11:30 PM Monday night, Bitcoin was trading at $16,770 after falling below $16,000 earlier in the day.