{"id":248682,"date":"2022-07-17T00:04:28","date_gmt":"2022-07-16T23:04:28","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=248682"},"modified":"2022-07-17T11:53:42","modified_gmt":"2022-07-17T10:53:42","slug":"248m-stablecoins-flow-out-of-coinbase-as-community-refutes-exchange-liquidity-issues","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/248m-stablecoins-flow-out-of-coinbase-as-community-refutes-exchange-liquidity-issues\/","title":{"rendered":"$248M stablecoins flow out of Coinbase as community refutes exchange liquidity issues"},"content":{"rendered":"

Rumors surfaced Friday night that Coinbase could face liquidity issues following leaked<\/a> emails stating that it would suspend its affiliate program. Business Insider reported<\/a> that they received emails stating;<\/p>\n

“This has not been an easy decision, nor was it made lightly, but, due to crypto market conditions and the outlook for the remainder of 2022, Coinbase is unable to continue supporting incentivized traffic to its platform.”<\/p><\/blockquote>\n

Some took to Twitter to claim the decision was indicative of liquidity problems for the top US exchange. Kurt Wuckert Jr of CoinGeek tweeted<\/a> that the suspension of the affiliate program, in combination with other decisions made by Coinbase over the past several weeks, signifies a “liquidity crisis” is looming.<\/p>\n

Coinbase outflows<\/h2>\n

On July 15, around 50% of stablecoins on Coinbase Pro left the exchange, according to on-chain data from CryptoQuant; the total value came to approximately $248 million. The percentage stablecoin outflow was significantly higher on Coinbase than on other exchanges such as Binance. Only around 1% of stablecoin reserves left Binance over the same period, but the tokens had a similar value at just under $300 million.<\/p>\n

\"coinbase
Source: CryptoQuant Coinbase Stablecoin Reserves<\/figcaption><\/figure>\n
\"binance
Source: CryptoQuant Binance Stablecoin Reserves<\/figcaption><\/figure>\n

When the value of stablecoins on the two exchanges is compared, the reduction in stablecoins held on Coinbase contrasts with Binance. Stablecoins peaked at around $1.2 billion on Coinbase in January 2022, but now the value stands at just $284 million. On Binance, the value remains in an upward trend since 2019.<\/p>\n

\"outflows\"
Source: CryptoQuant<\/figcaption><\/figure>\n

The data paints a less drastic but still worrying picture when comparing the Bitcoin held on each exchange. Coinbase has seen a steady decline in Bitcoin in its reserves, while Binance has been increasing during the same period.<\/p>\n

\"btc<\/p>\n

When all exchanges tracked by CryptoQuant are included, the Coinbase graph appears to follow the overall industry trend. The downtrend in Bitcoin held on Coinbase may simply be following the increased popularity of having crypto in non-custodial (unhosted) wallets.<\/p>\n

\"exchange<\/p>\n

Community defends Coinbase<\/h2>\n

Amid rumors of a crisis at Coinbase, several industry professionals have called out those suggesting the exchange is in trouble. Kraken's Dan Held tweeted, “Coinbase doesn't have a liquidity crisis,” while the developer responsible for the Coinbase affiliate program, NJ Skobene, confirmed the program's removal was not a warning sign.<\/p>\n

\n

As the guy that literally set up the affiliate program in 2019, shutting it down has nothing to do with liquidity.<\/p>\n

— NJ skoberne (@howdoyousaynejc) July 16, 2022<\/a><\/p><\/blockquote>\n