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CryptoCompare Asset Report - November 2022: Bitcoin Outflows Reach Record Highs Following FTX Collapse

The performance of digital and traditional assets diverged in November as the collapse of FTX erased billions of dollars from the digital asset markets.  This, combined with fears of market contagion, has led to severe negative performances this month, with BTC returning -16.3%, its worst monthly performance since June 2022.

 

On the other hand, the S&P 500 and NASDAQ attained positive returns after a lower-than-expected CPI figure. The Federal Reserve has begun to provide signals that the pace of future rate hikes will soon slow down – the market now expects a 50bps rate hike in the next FOMC meeting in December. 

The full report is available here.

Key takeaways:

  • In November, Bitcoin recorded the largest outflows from exchanges in its history, with net outflows of -96,040 BTC. Since FTX's collapse, centralised exchanges have witnessed a string of outflows as market participants look to safeguard their funds.
  • Wrapped Bitcoin (WBTC), a token that allows Bitcoin to be used for DeFi on other blockchains, lost its peg in November, falling as low as 0.9875. This was the largest depeg in WBTC since August 2020. The depeg is largely due to the collapse of FTX, which was the second largest marketplace for the WBTC/BTC pair after Binance. Moreover, the associated market maker, Alameda Research, was one of the largest minters of WBTC.
  • In November, BTC and ETH saw a major decline, recording a low of $15,480 and $1,074 on the 21st and the 23rd respectively. This was a year-low price for BTC, while ETH showed relative resilience by staying above its June 2022 lows. ETH has outperformed BTC in the second half of the year, recording a return of 22.4%, compared to BTC’s -10.8% return.
  • TVL in the Solana ecosystem severely declined in the month of November, falling 67.2% to $540mn. The TVL decline can be attributed to both declining prices and liquidity withdrawals – with TVL in SOL terms also declining 24.5% to 36.6mn SOL.
  • Following the collapse of FTX in November, there has been a rising trend in users moving their assets off exchanges to decentralised solutions, and self-custody. This has led to a spike in average daily active users in Cardano, which rose 15.6% to 75.8k in November – the highest active users recorded since May.

 

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BTC Records Largest Outflows from Exchanges Following FTX Collapse
Following the collapse of FTX on November 8th, centralised exchanges have seen a string of outflows as investors panic over the safety of their deposits on centralised platforms. In November, BTC recorded the largest negative flows from CEXs in its history, with net outflows of -96,040 BTC. It is likely that we will see a continuation of this trend as the ‘not your keys, not your coins’ narrative takes over the crypto markets.

Monthly Bitcoin Netflows On Centralised Exchanges, Nov 2021 -2022

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ETH Continues to Outperform BTC 
In November, BTC and ETH saw a major decline, recording a low of $15,480 and $1,074 on the 21st and the 23rd respectively. This was a year-low price for BTC, while ETH showed relative resilience by staying above its June 2022 lows. ETH has outperformed BTC in the second half of the year, recording a return of 22.4%, compared to BTC’s -10.8% return.

DEX Token Price in BTC %

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Solana TVL Continues To Decline While Volatility Soars
TVL in the Solana ecosystem has severely declined in the month of November, falling 67.2% to $540mn. The TVL decline can be attributed to both declining prices and liquidity withdrawals – with TVL in SOL terms also declining 24.5% to 36.6mn SOL.

As a prominent liquidity provider and token holder to the Solana ecosystem, the fall of Alameda has directly led to a decline in activity and liquidity in Solana applications. As a result, SOL has returned -56.5% in the month of November, and its volatility has reached a multi-year high of 243%.

Solana Ecosystem TVL, 2022

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