Stablecoin Reserves In Centralized Exchanges Continue To Fall After FTX Collapse

Gradually, alongside the cryptocurrency industry, stablecoins are growing in strength and popularity. Their growth results from the stability they offer against cryptocurrency volatility.

At the moment, USDT remains the largest stablecoin by market cap, as USDC, Binance USD, and DAI make up the top 4.

Prominent stablecoins after FTX collapse

The entirety of the stablecoin sector has a market cap of $138 billion, according to CoinMarketCap. The big four stablecoins contribute more than $130 billion to the figure, dominating the stablecoin market. Despite their growth and popularity, only a minimal amount of stablecoins are on cryptocurrency exchanges.

Presently, about 37 billion stablecoins are held in reserves of cryptocurrency exchanges. Binance is the highest contributor to this figure, with about $24 billion in stablecoins in its reserve. Coinbase has more than $973 million, Huobi $709 million, Bitfinex $145 million, Gemini 98 million, and Gate.io $78 million.

Stablecoin balances in centralized exchanges (Source: Glassnode)

Due to market uncertainty and low trust in centralized exchanges after the collapse of FTX, about 3.93 billion stablecoins have left exchanges in the last 30 days.

Despite the prevailing crypto winter, USDT has enjoyed more of a stable presence in the reserve of cryptocurrency exchange. Since August 2022, USDT has largely stayed flat at $18 billion in the reserve of cryptocurrency exchanges.

USDT balances on exchanges (Source: Glassnode)

USDC, on the other hand, has enjoyed some growth while trying to curb USDT’s dominance in the stablecoin market. Since the collapse of FTX in early November 2022, the amount of USDC in the reserve of cryptocurrency exchanges doubled to $5 billion.

USDC balances on exchanges (Source: Glassnode)

However, the resilience the stablecoin sector has been enjoying since the collapse of Terra Algorithm stablecoin UST is somewhat under threat. Following the announcement of Huobi Global to delist the HUSD stablecoin, the token has suffered a massive decline.

Shortly after the announcement, the stablecoin fell 72% off its dollar peg, and now HUSD is trading at 13 cents. In a sharp dip, the amount of HUSD in cryptocurrency exchange reserves is about to surpass its all-time low of $65 million.