Many enthusiasts keep a close eye on the Binance exchange. There is unfounded fear the exchange may have some liquidity issues and the ongoing large withdrawals fuel unease. However, it is also worth noting less than 20% of all platform addresses primarily focus on altcoins, and BNB represents under 11% of addresses.
Binance Traders Favor Stablecoins
It is always difficult to determine the portfolio of cryptocurrency users on centralized exchanges. While there is no data for individual users – not known to the public, at least – there are ways to analyze the overall holdings in known Binance addresses. A Dune Analytics dashboard like this one attempts to break down the exchange’s holdings and how that reflects on individual users. That doesn’t mean the portfolio alignment applies to everyone, but it is a good market sentiment overview regarding altcoins and stablecoins.
As more and more money leaves Binance, traders have become concerned. That is normal in the wake of the FTX debacle, which still causes friction today. Thankfully, former CEO Sam Bankman-Fried has finally been arrested, although that doesn’t ensure affected users will get their money back. It also means Binance has no noteworthy competition in terms of trading volume. Even so, billions of dollars in funds left the exchange this past month, and deposits aren’t filling the void.
Even today, several big transactions have been made to pull out millions in USDT and USDC. That is interesting, as there are rumors regarding USDC and Circle. Overall, there’s much speculation and little credible evidence at this time. However, it is always best to be cautious rather than overly optimistic. Centralized exchanges are and will always be a liability.
Despite these outflows, stablecoins represent the majority of assets managed by Binance. BUSD, USDT, and USDC represent a combined $22 billion. The only exceptions in the top six include ETH (including stETH), BNB, and COCOS. Interestingly, according to the dashboard, the exchange has no other asset worth over $1 billion on its balance sheet. That confirms altcoins aren’t that big of a deal in the grand scheme. They aren’t always worth investing in either.
Do Altcoins Even Matter?
There are many opinions on whether investing in altcoins is smart. More often than not, it isn’t worth it due to their high volatility. Moreover, altcoins – excluding stablecoins, WBTC, renBTC, ETH, stETH, and BNB – represent under 20% of all assets on Binance. That is still more than BNB (under 11%) and ETH (under 15%). However, it shows how dominant ETH and BNB are where altcoins are concerned. Everything else is mainly “noise”, even though that includes some top coins by market cap.
It is also interesting to see the favoritism toward stablecoins. They represent nearly 55% of all assets on the exchange. Most of that comes from BUSD, the stablecoin issued by the exchange, but it is still significant. There has been little market excitement in 2022, especially for altcoins. It makes investors flock back to established assets, like ETH, BNB, and pegged currencies.
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