Bitfinex Cryptocurrency market funds outflow reached $55 billion in August.

Bitfinex saw $55 billion in cryptocurrency funds withdrawn from the market in August.

Author: Ana LianGuaiula Pereira, Cointelegraph; Translation: Song Xue, LianGuai

According to a report released by the cryptocurrency exchange Bitfinex, the capital outflow in the cryptocurrency industry reached $55 billion in August.

This analysis is based on the Total Realized Value indicator, which measures the realized capital of Bitcoin and Ethereum, as well as the total supply of the top five stablecoins: Tether, USD Coin, Binance USD, Dai, and TrueUSD (TUSD). The report states: “A deeper analysis of the data reveals a common trend: capital outflows have started to occur in the industry since early August.”

According to this indicator, the cryptocurrency market has lost about $55 billion in the past month. The capital outflow not only affects Bitcoin but also affects the liquidity of Ethereum and stablecoins. Bitfinex said: “According to Bitfinex data, August was the largest red monthly candle for BTC since the bottom of the bear market formed in November 2022, with a price of -11.29%.”

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Net change in the total market realized value. Source: Glassnode/Bitfinex

The analysis also points out that event-driven volatility will return, meaning individual events may have a greater impact on prices and overall market trends. In August of this year, two isolated events had a significant impact on the price of Bitcoin. On August 17, a flash crash caused Bitcoin to sell off by more than 11.4%.

Bitfinex stated: “We believe that while volatility indicators remain low, market liquidity tightening makes isolated events have a greater impact on market trends.”

The analysis indicates that Bitcoin open interest contracts have outperformed the cryptocurrency market due to increased institutional interest and wash trading on certain exchanges. Ethereum futures and options have fallen significantly in 2023, to $14.3 billion per day, nearly a 50% drop from the two-year average.

Bitcoin open interest contracts across different exchanges. Source: CryptoQuant

The open interest of specific contracts, such as Bitcoin futures or options, represents the total number of outstanding positions. This is an indicator of how much capital is invested in Bitcoin derivatives.

Bitfinex wrote: “The trend in the derivatives market, especially the open interest of futures and options, reflects a pattern of low liquidity.”

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