Cryptocurrency Exchange Huobi is Seeing Significant Amounts of Token Withdrawals

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Last Updated on January 6, 2023 by Bitfinsider

According to the data found on the chain, traders may have doubts about the viability of Huobi in the long run. In the previous twenty-four hours, the exchange has seen a net outflow of sixty-four million dollars, which coincided with chaotic trading in the Asia hours for its HT token after it confirmed a twenty percent reduction in personnel. According to the data provided by Crypto Analyst Nansen, this raises its weekly outflow figure to more over $100 million, which contrasts to rival Kraken’s outflow of only $22 million.

According to observations made by Nansen, the largest outflows occurred in wallets holding substantial sums of stablecoins like as USDT, USDC, and Ether (ETH).

Source: Twitter

Meanwhile, Justin Sun, who is a member of the advisory board at Huobi, contributed one hundred million dollars to the exchange. According to LookOn Chain, wallets that have historically been attributed to Sun withdrew $100 million in USDC and USDT from Binance, and subsequently transferred into Huobi.

According to a tweet sent by Sun, the secret to Huobi’s success is to “Ignore FUD and Keep Building.” Huobi’s stablecoin balance was $681 million before the influx, which represents a decrease of 9.5% in one week. Before that exchange went down in November of last year, there was a significant rise in the amount of stablecoins that were taken out of FTX.

Source: Twitter

Ki Young Ju, CEO of analytics firm CryptoQuant said: “Huobi seems to be very vulnerable at the moment.” Ju pointed out that whereas Binance’s bitcoin (BTC) reserves have increased by more than 100% over the course of the past year, Huobi’s have decreased by 90%. According to CryptoQuant’s research, the number of active user addresses on Huobi has also decreased dramatically.

In a report, it stated: “Huobi’s user activeness dropped 44x lower from the peak in May 2019, and 20x lower than Binance as of 3rd Jan., 2023.”

During the course of this stress test, the status of the Huobi Token (HT) is an area of particular interest.

According to a recent research published by CryptoQuant, out of all the exchanges, Huobi has what the company refers to as the “dirtiest” reserves since it is the exchange that is most dependent on its own exchange token. It was mentioned that OKX and Deribit have the cleanest.

Nansen reported that Huobi controls 81% of the total circulating supply of the HT token, which comes out to 131.6 million out of the total 162.2 million.

According to the data provided by CoinGecko, the coin had a trading volume of barely $21 million over the course of a 24-hour period, although its market valuation was $770 million.

Statistics by CoinGecko also shows that the +2% bid depth of it still stays quite narrow when compared to the bid depth of other tokens with a market size that is comparable. In a recent article, Clara Medalie, the director of research at Kaiko, pointed out that the absence of 2% bid depth was a huge warning flag for FTX’s FTT token. She said this in reference to the token’s market value.

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