According to an analysis of the realized value metrics of the seven largest cryptocurrencies, the outflow of funds from the crypto industry reached $55 billion in August 2023.
A report by Bitfinex shows that the crypto industry began experiencing massive capital outflows from early August. By the end of the month, users withdrew about $55 billion from the crypto market.
Bitfinex analysts came to these conclusions after studying the aggregate metrics of the realized value of Bitcoin, Ethereum, and the five largest stablecoins, i.e., Tether, USD Coin, Binance USD, Dai, and TrueUSD.
Analysts noted a return to event-based volatility when certain events can have a tangible impact on the prices of particular assets and on the market movement. In August, there were two such events at once, which greatly affected the prices of the first cryptocurrency:
- on August 17, when BTC fell by more than 11.4%;
- on August 29, BTC quotes rose by 7.6% in two hours after Grayscale’s partial court victory over the SEC.
Bitfinex analysts believe that the impact of certain events on market movements was enabled by low liquidity that fell despite low volatility metrics. This is indicated by some features in the behavior of traders in the derivatives market in August 2023:
- an increased institutional interest in BTC;
- wash trading activity on some exchanges;
- a decreased interest in futures and options on ETH.
August was one of the worst months in the last three years in terms of spot trading volume on CEXs.
