Chainalysis has announced that the large influx from centralized to decentralized services has been created by users and bots that have exploited the crisis for profit.
Chainalysis analysts believe that the position of the cryptocurrency market is still reliable, despite the fiasco of the FTX exchange:
“The fundamentals of the market remain stable, the situation with FTX arose from financial fraud, and not problems of the blockchain industry or cryptocurrencies.”
Experts warn that many more companies could face insolvency issues after the fall of FTX. According to the data, investors withdrew about $270 billion worth of cryptocurrency from the market in the four days after the collapse of FTX.
This caused the total market capitalization of the market to drop to a low of $830 billion on November 10. Curiously, this level of capitalization was observed in January 2018.
“Now users are cashing out cryptocurrency at about the same rate as before the FTX crisis,” analysts say.
Chainalysis notes that net asset inflows to centralized exchanges (CeFi) have declined. Users are still withdrawing assets and looking for self-custody solutions, albeit not as intensely, analysts say. Experts note that only part of the capital actively moved to decentralized financial platforms (DeFi) and cold wallets.
“Flows from CeFi to DeFi have increased, but are not driving the growth in transaction volume on decentralized exchanges (DEXs). About 90% of the DEX inflows came from other smart contracts and MEV bots,” the report says.
MEV bots scan transactions in the Ethereum mempool and process the more profitable ones first.
The analytical company Glassnode reported that on November 13, the withdrawal of bitcoins from cryptocurrency exchanges reached an almost historical maximum and amounted to 106,000 BTC in a month.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
