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Binance Bitcoin Reserves Slumped $355M in January as User Balances Rose by $4.4B

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Cryptocurrency exchange Binance’s bitcoin (BTC) reserves dropped by $355 million last month while customer balances grew by more than $4 billion, bringing the two figures more in line with each other, according to recently published exchange reserves data.

At the turn of the year Binance, the largest crypto exchange by trading volume, held 622,192 BTC across third-party custody and exchanges balances. On Feb 1, that figure had shrunk to 618,563 BTC. Customer net balances, in contrast, grew from 575,296 BTC to 615,816 BTC, meaning the rate of collateralization fell to 100% from 108% .

Balances of Tether’s USDT stablecoin also fell, dropping about $25 million as customer balances rose $2.6 billion.

The motive for the shift in reserves remains unclear, and Binance did not immediately respond to CoinDesk’s request for comment.

The exchange might be reallocating funds to generate a return on investment instead of over-collateralizing, and it’s worth noting that Binance remains in a healthy financial position. At current prices it holds $160 billion worth of 34 crypto assets listed on the report, all of which are held at a 1:1 or greater ratio against user balances.

Exchanges began posting proof of reserves in response to the FTX collapse in November 2022. That was prompted by a weak balance sheet comprising illiquid altcoins, eventually leading to, in effect, a bank run where the exchange couldn’t fulfill user withdrawals.

The collapse of FTX spurred a liquidation cascade across the entire industry, with bitcoin dropping to a cycle low of $16,463. It has since recovered and is was recently trading at $97,373.

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Coinbase Outpaces S&P 500 With 43% June Rise as Stablecoin Narrative Grows: CNBC

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Shares of Nasdaq-listed cryptocurrency exchange Coinbase (COIN) rose 43% this month, making the firm the top performer in the S&P 500 since it joined the index at the end of last month.

June’s run is already the stock’s best since November and caps three straight monthly gains. Coinbase’s shares reached their highest level since their public debut.

COIN hit a $382 high this week before enduring a slight correction, ending the week at $353 and seeing a slight 0.7% drop in after-hours trading to $351.

The wider S&P 500 index rose roughly 5% in June as geopolitical tensions eased.

Washington’s progress on the GENIUS Act, Congress’s first rulebook for dollar-pegged stablecoins, helped shift investor focus from trading fees to stablecoin revenue.

The bill brightened the outlook for Circle, whose shares hit a record high and saw its market cap near that of Coinbase this week.

Coinbase keeps all yield on USDC balances held on its platform and nearly half of other USDC income, equal to about 99 percent of Circle’s revenue, giving shareholders indirect exposure at no added cost, CNBC reported Friday, citing analysts including Citizens’ head of financial technology research Devin Ryan.

Trading, however, remains subdued. Average daily volume on Coinbase has drifted lower since April.

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Robinhood Launches Micro Bitcoin, Solana and XRP Futures Contracts

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Robinhood (HOOD) has introduced micro futures on bitcoin (BTC), solana (SOL) and XRP in the United States., expanding its existing crypto futures offering for its nearly 26 million funded accounts.

Micro contracts need far less collateral than full-size futures, letting traders take directional positions while committing a smaller slice of capital.

The contracts offer traders more flexibility to bet on a cryptocurrency’s future price direction or hedge current positions given their smaller size.

The launch rounds out a futures suite that began with BTC and ETH in January. It also comes weeks after the firm closed its $200 million purchase of Bitstamp and finalized a $179 million deal for Canada’s WonderFi.

Robinhood’s data shows that crypto notional volumes have exploded upward over time, reaching $11.7 billion in May. The figure marks a 36% rise month-over-month, and a 65% growth year-over-year.

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Why is XRP Up Today? Trio of Catalysts Sees Token Outperform Wider Crypto Market

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XRP climbed 5.5% to $2.19 in the last 24 hours after a trio of catalysts converged to help the cryptocurrency outperform the wider cryptocurrency market.

One of the catalysts was launch of XRP micro futures on Robinhood. The contracts offer traders more flexibility to bet on the cryptocurrency’s future price direction or hedge current positions given their smaller size.

Regulatory fog also thinned. On Friday, Ripple withdrew its cross-appeal in its long-running U.S. Securities and Exchange Commission (SEC) lawsuit. The SEC sued Ripple back in 2020 over its XRP sales, alleging these violated securities laws. The SEC is expected to drop its own appeal, leaving last year’s ruling, ordering Ripple to pay a $125 million civil penalty to the SEC, intact. The move could lift a lid that had kept some investors on the sidelines.

On-chain data rounded out the bullish setup. The XRP Ledger logged over a 1.1 million active addresses over the past week according to crypto analyst Ali Martinez, who cited Glassnode data.

XRP’s rise saw it outperform the wider crypto market, with the broader CoinDesk 20 (CD20) index rising 1.7% in the last 24 hours.

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