Crypto market outflows reached $55B in August as liquidity dwindled — Bitfinex

September 14, 2023

Capital outflows in the crypto industry reached $55 billion in August, according to a report released by crypto exchange Bitfinex.
The analysis is based on the aggregate realized value metric, which measures the realized capital of Bitcoin (BTC) and Ether (ETH) with the combined supply from the top five stablecoins: Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Dai (DAI), and TrueUSD (TUSD).
About $55 billion was drained from the crypto markets over the past month.
This capital outflow affected not only Bitcoin but also Ether and stablecoin liquidity.
August was the largest red monthly candle for BTC since the bear market bottom was formed in November 2022, with a decrease of 11.29%.
Event-based volatility has returned, where isolated events have a significant impact on prices and overall market movements.
In August, a flash crash and Grayscale’s partial legal victory over the Securities and Exchange Commission had a significant impact on Bitcoin prices.
The liquidity crunch in the market has allowed isolated events to have a bigger impact on market movements.
Bitcoin open interest has outperformed the crypto markets due to increased institutional interest and wash trading on some exchanges.
Ether futures and options have declined significantly in 2023, to $14.3 billion per day, a steep decline of almost 50% from the two-year average.
Low liquidity patterns in the derivatives market mirror the trajectory seen in open interest across both futures and options.