Many enthusiasts have turned their attention to the Binance exchange. There are unfounded concerns that the exchange may have liquidity issues and that large ongoing withdrawals may be fueling fears. However, it is also worth noting that less than 20% of all platform addresses are primarily altcoin focused, while BNB is less than 11% of addresses.
Binance Traders Prefer Stablecoins
Determining a cryptocurrency user’s portfolio on a centralized exchange is always difficult. Although we don’t have data for an individual user (at least not known to the public), we do have a way to analyze his entire known address holdings on Binance.A Dune Analytics dashboard that looks like This one I’m trying to analyze an exchange’s stake and how it reflects on individual users. This does not mean that portfolio integrity is for everyone, but it outlines market sentiment regarding altcoins and stablecoins.
As more funds left Binance, traders became concerned. That’s normal as a result of the FTX debacle, which still causes friction today. Thankfully, former CEO Sam Bankman-Fried was finally arrested, but affected users got their money back. No warranty. It also means that Binance has no notable competition in terms of trading volume. Still, billions of dollars have flowed out of exchanges in the last month, and deposits haven’t filled the void.
Even today, some big trades are being made to withdraw millions of dollars in USDT and USDC. It’s interesting because there are rumors about USDC and Circle. Overall, there’s a lot of speculation at the moment, and very little reliable evidence. However, it’s always best to be cautious and not overly optimistic. Centralized exchanges are always responsible.
Despite these outflows, stablecoins still make up the majority of assets managed by Binance. BUSD, USDT, and USDC together represent $22 billion. The only exceptions to the top 6 are ETH (including stETH), BNB, and COCOS. Interestingly, according to the dashboard, there are no other assets on the exchange’s balance sheet above $1 billion. This confirms that altcoins are not that big of a deal in the grand scheme of things. Neither is always worth investing in.
Are Altcoins Important?
There are many opinions on whether investing in altcoins is wise. They are often volatile and therefore worthless. Additionally, altcoins excluding stablecoins, WBTC, renBTC, ETH, stETH, and BNB, account for less than 20% of his total assets on Binance. This is still larger than BNB (less than 11%) and ETH (less than 15%). However, it shows how dominant ETH and BNB are when altcoins are involved. Other than that it’s mostly “noise”, but it does include some of the top coins by market cap.
It’s also interesting to see the favoritism towards stablecoins. They represent almost 55% of the exchange’s total assets. Most of it comes from BUSD, an exchange-issued stablecoin, but it’s still important. 2022 has seen little market excitement, especially for altcoins. This brings investors back to established assets such as his ETH, BNB and fixed currencies.
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