In no small part due to the recent increase in cryptocurrency values, exchanges have seen a sudden switch in the movement of their capital. Where there was once a significant amount of inflow and relatively little outflow, the two have flip-flopped in recent days, with more outflow than inflow being recorded.
According to TokenAnalysts, a blockchain data provider, the amount of capital outflow from major exchanges has been greater than inflow by around $622 million over the past week. The London-based company based its analysis on figures available from several platforms, BitMEX, Binance, Kraken, Bitfinex and others.
Bitcoin Core (BTC) has reached levels not seen in a number of months. Part of the performance, according to a Bloomberg report, could be a result of inflation caused by capital flight as investors became concerned over scandals involving Bitfinex and the Tether stablecoin. Bitfinex has come under attack by the New York State Attorney General’s Office for allegedly losing $850 million in assets and then trying to cover up the loss through deals with Tether.
The media outlet, in quoting data from TokenAnalyst, states that Bitfinex has seen an outflow of more than $1.7 billion in both BTC and Ether (ETH) since April 26, the same day the New York AG submitted its complaint against the company in court. As the controversy became more widespread, BTC’s price began trading at a premium, reaching as much as 6% as other currencies saw their values decrease.
The Bitfinex case also caused Tether issues to surface. Where it had always purported that the stablecoin was pegged to the US dollar on a one-to-one ratio, Tether’s own lawyers admitted that this isn’t true. This is bad news for Tether investors and University of Texas finance professor John Griffin told Bloomberg,