Affected by panic, Huobi Bitcoin "poured" into Binance, setting a record for annual outflow and inflow

Wu said blockchain learned that according to the data of CryptoQuant and Glassnode, Bitcoin on Huobi platform began to flow into Binance exchange "crazily" on November 2. The outflow of Bitcoin from Huobi and the inflow of Bitcoin from Binance both set records this year. In the previous three months, the outflow and inflow trends were opposite, and Bitcoin had been flowing from Huobi to Binance. Panic sentiment was the main factor. When Binance was hacked in May 2019, Bitcoin also fled from Binance to Huobi.

On October 16, OKEx stopped withdrawing coins. The media revealed that the founder, Xu Mingxing, had lost contact a week ago and was assisting the Shanxi police in their investigation. On November 2, Wu said that Huobi’s COO also assisted the Shanxi police in their investigation, but Huobi did not restrict withdrawals and operations were temporarily normal. Due to the panic in the market and the fact that Binance is the most familiar head exchange to Chinese users besides OKEx Huobi, the inflow of Bitcoin is also normal.

In the chart, the blue line is the bitcoin flowing from Binance to Huobi, and the orange line is the bitcoin flowing from Huobi to Binance. From the data, we can see that Huobi bitcoins are "crazily" flowing into Binance starting from November 2. Coindesk's calculations show that from November 2 to November 11, a total of 18,652 bitcoins flowed from Huobi to Binance.

Looking at the chart, from August to early November, the flow of Bitcoin was the opposite, flowing from Binance to Huobi, perhaps because more users used OTC to buy Bitcoin on Huobi. This flow also shows that Binance was at a disadvantage in the competition with Huobi in the Chinese market until this black swan event occurred.

According to CryptoQuant data, the amount of Bitcoin flowing from Huobi to medium-sized exchanges with a certain number of Chinese users, such as Kucoin and Gate, also peaked on November 2, but the total amount was relatively small; there was no obvious change in the amount of Bitcoin flowing from Huobi to overseas mainstream exchanges such as Coinbase and Bitfinex and contract exchanges such as Bybit and BitMEX, because Huobi users are mainly Chinese users.

According to Glassnode data, after November 2, Huobi experienced the largest outflow of Bitcoin in the whole year, while Binance experienced the largest inflow of Bitcoin in the whole year. Glassnode shows that the maximum outflow of Bitcoin from Huobi in one day exceeded 25,000, while the maximum inflow of Bitcoin from Binance in one day exceeded 12,000. (Red is the Bitcoin flow of Binance, green is Huobi)

According to Chain.info data on November 14, Huobi still has 141,451 bitcoins in reserve, and Binance has multiple cold wallets, which hold 74,618, 65,236 and 7,794 bitcoins respectively. According to Chain.info data on October 27, the balance of Huobi's bitcoin cold wallet was 203,502.09. Based on this calculation, Huobi's cold wallet has reduced nearly 60,000 bitcoins. It is possible that many users have transferred their bitcoins to cold wallets instead of centralized exchanges such as Binance.

It is normal for panic to cause big investors to flee to another leading centralized exchange. Binance was hacked in 2019, and on May 7, Bitcoin flowed from Binance to Huobi in a panic. However, due to the small loss and the promise of full compensation, it quickly returned to normal. Huobi is also recovering from the panic, but since the Shanxi case is still under investigation, the panic may not disappear completely in the short term. (The blue line is the Bitcoin flowing from Binance to Huobi)

Industry insiders pointed out that under the increasingly stringent regulatory environment in China, companies that successfully expand overseas are under relatively less pressure and are more likely to succeed, such as Binance, KuCoin, Bybit, etc. If Huobi OK can successfully survive this time, it should also accelerate the pace of comprehensive overseas expansion and dilute its local color and user dependence.

Thanks to Hope Cooper for assisting the author in retrieving data; the header image is from the Block; for background information, please refer to the old article: Multiple sources confirm that Huobi COO is under investigation and operations and withdrawals are temporarily normal