The relatively low realization of profits and losses, combined with the virtual lack of reaction from hodlers, speaks to the “indifference” of investors to lawsuits. SEC against Binance and Coinbase. This conclusion was reached in Glassnode.
For more information SEC charges against #Binance and #coinbase and subsequent response of market particpants, please visit the latest Week On-Chain👇🏼https://t.co/EQBG3eUk85 pic.twitter.com/WJMvgGkPS3
— glassnode (@glassnode) June 13, 2023
On June 5, the SEC sued Binance and its CEO Changpeng Zhao. The agency filed 13 charges, including the sale of unregistered securities.
Reports later emerged that the Commission’s claims were similar to those brought by the agency against the failed crypto exchange FTX and its subsidiary Alameda Research.
On June 6, the SEC filed a lawsuit against the Coinbase exchange. The regulator also alleges that the platform violated securities laws.
The chart below shows a $1.6 billion (~20%) decline in Binance’s stablecoin balance over the past seven days and more “modest” outflows of Bitcoin and Ethereum from the platform (5.7% and 7.1% respectively).
In the context of absolute values, the market reaction did not shake Binance’s position as one of the largest holders of the first and second cryptocurrencies by capitalization.
The reduction in stablecoin balances began back in November 2022 after the SEC claims against BUSD. Since then, the figure has fallen by 75%, to $6.5 billion.
For Coinbase, changes in reserves turned out to be less dramatic – the balances of stablecoins actually remained the same, bitcoin – decreased by 2300 BTC (~0.5%). The same cannot be said about Ethereum — clients withdrew 291,000 ETH (~8%).
“This can be attributed to the fact that the services offered staking have been criticised, experts explained.
The analysis of deposits/outflows of funds in bitcoins to the platforms showed the following:
- Transactions under $10 million saw consistent withdrawals, with a net daily outflow of over $130 million a day, sustained throughout the week;
- For deals worth more than $10 million, daily inflow rates ranged from $15 million to $30 million.
“Very large organizations (such as institutions) are more exposed to SEC news than smaller ones,” experts pointed out.
The chart below showed an increase in inflows and outflows of approximately 70% to $845 million.
“The cumulative withdrawal exceeded the deposits by about 10%. Non-custodial storage of assets remains the preferred strategy for investors. Similar dynamics were observed after the collapse of FTX”, analysts noted.
After analyzing the deposit of bitcoins by types of investors, the experts determined that speculators accounted for 76.4% of the total volume, and hodlers – less than 2%. Another 21.7% were intra-exchange transfers.
The first group has historically formed 60% of revenues. In other words, last week it was more active than at other times, experts explained.
The chart below confirms the previous finding: A group of short-term investors funneled 0.93% of their holding balance to the exchanges. The indicator did not exceed the 1% threshold typical for episodes of high volatility, although it showed a noticeable surge compared to the base level of the 2021-2022 cycle.
Long-term holders were “surprisingly calm”, showing no noticeable reaction to the news, the specialists stressed.
The volume of receipts on the exchanges of their coins amounted to only 0.004% of the total balance. In 66% of all other trading days in the historical retrospective, there was a larger relative inflow, the experts calculated.
The cumulative realized gains and losses over the past seven days have been relatively small. In this stream, most of it was purchased at a cost close to the current price.
“This speaks to both a degree of confidence (investors are generally unaffected by the news) and apathy (the current price range is not sufficient incentive to spend).”experts concluded.
Recall that the founder of the asset management company Mott Capital Management, Michael Cramer, allowed the price of the first cryptocurrency to fall to levels near $20,000.
Former former chairman CFTC Timothy Massad stated that the future of digital assets depends on the outcome of the SEC litigation against Binance and Coinbase.
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