CryptoQuant Reports Decline in Binance’s Bitcoin Reserves as Retail Flow Shifts to Coinbase

Last updated: November 23, 2023 02:12 EST
. 2 min read

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.

Bitcoin reserves on the world’s largest cryptocurrency exchange, Binance, are rapidly depleting, according to data from blockchain analytics firm CryptoQuant.

The outflow is notably shifting towards the premium digital asset platform of the US-based crypto exchange Coinbase.

Providing more details, CryptoQuant points out that Coinbase Pro has so far received 12,000 Bitcoins while there has been a direct reduction in Binance’s reserves, with its figure standing at 5,000 BTC.

$BTC moving from Binance to Coinbase

“Coinbase’s reserves have since increased by around 12,000 BTC while Binance’s have decreased by 5,000 BTC.”
by @gaah_im

Link 👇https://t.co/92UQ3ODcIt

— CryptoQuant.com (@cryptoquant_com) November 23, 2023

Despite Coinbase gradually increasing its Bitcoin reserves at the expense of its competitor, CryptoQuant noted that spot Bitcoin trades on Binance still exceed those on the Coinbase exchange by six times.

Several investors in the crypto community speculate that the recent $4.3 billion fine imposed on Binance could contribute to Coinbase’s massive retail outflows.

However, CryptoQuant reveals this is largely connected to the ongoing discourse surrounding the spot Bitcoin exchange-traded fund (ETF).

After 16:00 yesterday, a movement (not yet significant) of flows took place between #Binance and Coinbase Pro.

Coinbase’s reserves have since increased by around 12,000 #BTC while Binance’s have decreased by 5,000 #BTC.

The #Bitcoin ETF Spot is close to being approved and… pic.twitter.com/u4wCkAidko

— G a a h (@gaah_im) November 22, 2023

In recent months, Bitcoin spot ETF has garnered attention in the nascent industry. So far, several asset management firms, including BlackRock, Valkyrie, Grayscale, Fidelity, WisdomTree, and several others, have submitted applications and amendments to the US Securities and Exchange Commission (SEC).

The unifying force across all of these applicants is the Coinbase exchange, which serves as a key custodian for their spot Bitcoin ETFs.

The Coinbase crypto exchange, which is listed on the Nasdaq trading floor, is the preferred trading firm for most institutional players in the US and in the world.

Hence, CryptoQuant states that these outflows are only natural, given the key role Coinbase is expected to play in the facilitation of Bitcoin spot ETFs for these trillion-dollar asset management firms.

Bitcoin Spot ETF Approval Ever Closer

Over the past two years, several legacy-backed and crypto-facing management companies have sought approval from the US Securities and Exchange Commission (SEC) for a Bitcoin and Ethereum spot exchange-traded fund (ETF).

Despite these efforts, the SEC has been reluctant to approve such ETFs, expressing concerns about market manipulation, the accurate tracking of underlying asset prices, and potential risks to investors.

However, recent developments suggest an increased likelihood of approval for a Bitcoin spot ETF in the coming weeks.

According to Bloomberg’s ETF analyst James Seyffart, the approval percentage has significantly increased to 90%, with January 2024 being the anticipated timeframe for the regulatory green light.

Bloomberg analysts, Eric Balchunas and James Seyffart predicted in a note yesterday, that a spot #Bitcoin ETF has a 90% chance of approval by January 2024 🚀

Are you ready for it? pic.twitter.com/JICT0ov6xt

— Lior (Lee-or) (@liorsela) October 13, 2023

Meanwhile, the tides have rapidly changed in the last 48 hours following Binance’s enforcement action.

Binance uncertainty out of the way, its activities will now be monitored by an independent compliance monitor.

=> Much higher ETF approval odds

Waiting for the market to agree with me that this is actually bullish. https://t.co/OzReCqeOkP

— Alex Krüger (@krugermacro) November 22, 2023

According to a crypto trader on X (formerly Twitter), the chances of a Bitcoin spot ETF approval is even higher, given the resolution of Binance’s legal issues.