Exits from cryptocurrency exchanges are seen as a positive development for related cryptocurrencies. If the exit is through stable coins, how should we interpret this situation?
What does the very rare stable coin exit from exchanges mean?
Option, There has been approximately $1.7 billion worth of stable coin outflows from derivatives exchanges using futures and leverage.. We see this data shared by CryptoQuant in the chart below.
Crypto money outflows from exchanges are interpreted as a positive development for related cryptocurrencies.. Because it is interpreted as a long position on the relevant crypto currency.. However, we cannot make a similar interpretation for stable coin outputs.
Stable Coin outputs are not a frequently observed situation.. According to some analysts, large outflows from derivative exchanges can be seen as a downtrend for the crypto money markets in general.. Immediately after this date, Bitcoin broke its historical record and then entered a downward trend.
However, there may be a different reason for the stable coin exit.. As it is known, the Chinese government has tightened the bans on Bitcoin even more.. Behind these bans, some Chinese investors are leaving the Bitcoin markets.. Others are switching to alternative markets such as OTC (over-the-counter) markets.. This transition period may cause stable coin exit from the market.
The fact that the fund exit coincides with the end of the month strengthens the above comment.. Because monthly contracts in derivative markets are renewed at the end of the month.. It is worth remembering that over $2 billion in options contracts were terminated last Friday.. Investors, whose contracts are likely to expire, are transferring their digital assets to different platforms.
The Chinese government’s Bitcoin bans seem to cause serious structural changes across the markets.. Intense migrations are expected, especially in the Bitcoin mining industry. In this context, there may be a migration from China to North America and Europe.
Why does China ban Bitcoin and cryptocurrencies? Our readers who are curious about the answer to this question can take a look at the news link below.
Please See: Why is China really banning Bitcoin and mining?
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