TL:DR
- Bitcoin holdings on Bybit fell by 3.13% and Ethereum holdings by 5% in the last month.
- In contrast, balances of the stablecoin USDT increased by 27.89% during the same period.
- Despite the withdrawals, Bybit maintains healthy reserve ratios, all above 100%.
Cryptocurrency exchange Bybit published its 27th Bybit Proof of Reserves report, revealing a notable decrease in Bitcoin (BTC) and Ethereum (ETH) holdings within its user accounts.
Bitcoin balances stood at approximately 64,000 BTC, representing a 3.13% drop from the previous snapshot on September 22. Concurrently, Ethereum holdings experienced an even larger reduction of 5%, falling to about 542,200 ETH.
These declines in the main cryptocurrencies contrast sharply with the behavior of the stablecoin USDT. The report shows that USDT balances surged by 27.89%, reaching approximately 6.389 billion tokens.
This monthly snapshot, which Bybit maintains to ensure transparency and demonstrate that it backs all customer deposits, suggests a significant movement by users away from volatile assets and towards the stability of the digital dollar.
Implications of the fund movements
The drop in Bitcoin (2,068 BTC) and Ethereum (28,549 ETH) holdings could be interpreted in several ways. On one hand, the outflow of BTC from exchanges is often considered a bullish signal, indicating that users are moving their assets to self-custody wallets for long-term holding.
On the other hand, the drastic increase in USDT (1.393 billion tokens) suggests an asset rotation, where users might be securing profits or seeking refuge from market volatility by moving their funds into stablecoins within the same exchange.
Despite these fluctuations, the Bybit Proof of Reserves report confirms that the exchange maintains healthy reserve ratios for all major assets. Bitcoin is backed by 103%, Ethereum by 101%, and USDT by 110%. Other assets like USDC show an even higher ratio (153%).
While confidence is maintained thanks to these figures, the market will be watching to see if the trend of BTC and ETH withdrawals continues, or if the capital in USDT is simply waiting for a re-entry point into the market. Interestingly, Ethena’s USDE stablecoin fell the most, by 42.37%.
