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Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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The reserve reports of major exchanges Gate and Bybit paint a clear picture of deteriorating risk appetite, as traders flee volatile cryptocurrencies in favor of stablecoins.
Users’ holdings of Bitcoin and Ethereum on Bybit fell sharply in October, while USDT balances rose by nearly 28%, as expectations for a rate cut faded and market volatility intensified.
Bybit’s latest reserve test snapshot, dated October 22, shows the user BTC holdings at about 64,000 coins, down 3.13% or 2,068 BTC from the September account.
ethereum holdings declined even more sharply, falling 5% to 542,200 ETH, a loss of 28,549 coins.
Meanwhile, users’ USDT balances increased by 27.89% to about 6.389 billion, an increase of 1.393 billion.
The exodus from risk assets came as Bitcoin reached close to $108,000 and Federal Reserve Chairman Jerome Powell indicated a slower path to political relief.
Exchanges Maintain Strong Reserve Ratios Despite Asset Transfer
Both platforms reported healthy reserve coverage despite changes in user composition.
Bybit maintained a 103% reserve ratio for Bitcoin and a 101% reserve ratio for Ethereum, ensuring that wallet balances exceeded user liabilities in all major tokens.
USDT reserves have reached 110%, reflecting the platform’s ability to accommodate growing stablecoin demand during the flight to safety.
Gate published figures as of October 28 showing total reserves of $11.676 billion with an overall reserve ratio of 124%.
BTC reserves stand at 24,833 coins against user balances of 18,537, pushing the excess reserve ratio from 33.48% to 33.96%.
ETH reserves rose to 419,096 tokens, raising the excess ratio from 23.58% to 25.93%. USDT reserves have grown to about 1.58 billion, covering user holdings of about 1.33 billion with a buffer of 18.74%.
Reserve ratios for altcoins, including GT, DOGE and XRP, exceeded 100%, reaching 150.98%, 108.12% and 116.66% respectively.
Gate’s reserves now cover nearly 500 types of user assets, the company said, using a Merkle Tree algorithm and zk-SNARKs for verification.
Market pressure builds as whales move currencies and retail sales fade
Bitcoin fell below $108,000 on Mondayextending a risk reset that accelerated the end of last week.
The pullback started in October”Uptober“narrative, which marketers are now recasting as “Red October“, as they head into November.
Ether fell 3.8% to $3,737 while XRP fell 3.1% to $2.43, dragging the total crypto market capitalization down 3.1% to $3.69 trillion.
Thin holiday trading, with Tokyo closed for a public holiday, boosted intraday swings during early Asian hours, according to a Cryptonews report
The high leverage built up through October left long positions vulnerable, and as prices slid, forced liquidations pushed spot levels lower.
Traders cited fading confidence in a faster easing cycle and a stronger dollar as the immediate catalysts for the sell-off.
Large holders added to the selling pressure.
According to a latest Cryptonew reportOn-chain data from Lookonchain shows that the whale pseudonymous BitcoinOG deposited about 13,000 BTC, worth $1.48 billion, to Kraken since October 1st, including 500 BTC on November 2nd.
Early adopter Owen Gunden transferred 3,265 BTC, valued at $364.5 million, to Kraken as of October 21, reactivating wallets that had been dormant for years.
Another Bitcoin OG, known for shorting Bitcoin during big swings, has made nearly $197 million since the timing of the October 11 crash.
Retail participation continued its steep decline. CryptoQuant data shows that daily flows from small holders to Binance have collapsed from about 552 BTC in early 2023 to just 92 BTC currently, a drop of more than 80%.
The 90-day moving average has fallen more than five times since the spot ETFs were launched in January 2024, as retail investors moved to ETF products or moved into long-term holdings, leaving institutional players and corporate treasury strategies to dominate market flows.
Yet even institutional appetite seems selective as it faces sustainability challenges. “When digital asset treasury companies trade below NAV, it is not a bubble that bursts, this is the inability of the market to price the infrastructure during a phase transition,“said Eva Oberholzer, Chief Investment Officer at Ajna Capital.
“This is exactly what happened with Internet infrastructure companies in 2001.” She noted that public equity markets are pricing digital asset treasury companies based on current cash flows.
He added that strategic buyers price them based on future utility value, creating a systematic undervaluation currently, a pattern reminiscent of PayPal trading below its cash value in 2002 before growing 400% in eighteen months.
