Some cryptocurrency exchanges are experiencing capital outflows exceeding capital inflows, Bloomberg writes. According to TokenAnalyst, these exchanges include Bitfinex, BitMEX, Binance and Kraken, and the outflows have been bigger than inflows by approximately $622 million in the course of the past five days.
In the case of Bitfinex, more than $1.7 billion of Bitcoin and Ether has left Bitfinex since April 26. This capital flight may contribute to Bitcoin’s 30 per cent price surge as people are abandoning Bitfinex’s stablecoin Tether due to last month’s fraud allegation.
“Since Tether is insufficiently backed, it means that some of the reserves backing customer assets on exchanges are likely insufficient,” said John Griffin, a finance professor at the University of Texas at Austin. “So smart customers will not custody their funds on exchanges and pull their crypto off exchanges. This could put further upward pressure on Bitcoin prices as one would rather take fake money and exchange it to Bitcoin.”