The weekend didn’t hold any major moves for cryptocurrencies, although Bitcoin returned just below $17,000. The situation for the leading digital currency remains in the balance, with the pressure continuing after the collapse of Sam Bankman-Fried’s FTX exchange. This is confirmed by the data on flows in recent months provided by CryptoCompare, which show that in November investors withdrew 91,263 coins from their wallets for a value of almost $1.5 billion, taking into account an average price in the month of $16,400 .
Withdrawals were also high in October, topping out at 75,294 bitcoins, with traders fleeing crypto following bankruptcies of lenders Celsius and Voyager Digital, as well as crypto hedge fund Three Arrows Capital. In the first days of December, however, there were outflows of 4.545 bitcoins, while in the same period last year there were inflows of 3,846.
Bitcoin: what these outflows mean
It is not known exactly whether these outflows have flowed into other portfolios or whether it is simply a directional change in investments, the fact remains that the signal is not positive for Bitcoin. Many are hoping that the cryptocurrency market situation will calm down in 2023, after this year’s earthquake with the implosion of the TerraUSD stablecoin and the string of illustrious bankruptcies. It is probable that, following what happened, the main countries worldwide will finally decide to regulate the sector and therefore certain extremisms would hardly be proposed again.
At the same time, it is considered difficult to see an overflowing rally like the one that started during the pandemic that brought Bitcoin to an all-time high of $68,990. Since then, the virtual currency has lost over three quarters of its value and, barring sensational twists and turns, a recovery in the short term seems objectively improbable even for the most loyal supporters. According to Eric Robertsen, head of research at Standard Chartered, the sell-off will continue in 2023. “More and more cryptocurrency companies and exchanges find themselves with insufficient liquidity, leading to more bankruptcies and a collapse in investor confidence in digital assets,” he said. stated.
In reality, the damage deriving from the default of FTX has not yet been quantified in perspective. In recent weeks, the lender BlockFi has also raised the white flag , which FTX had saved a few months ago with a loan of 275 million dollars. While others equally exposed to the Bahamas-based exchange, such as Genesis and Gemini, are highly at risk of filing for Chapter 11. The key point is that, even if the situation were to stabilize, the blow suffered by investors, who saw their capital melt away with the crypto crash, undermined confidence in the sector. And it will probably take some time to recover.
