Community Refuted Coinbase Liquidity Rumors After $248M In Outflows

The community refuted coinbase liquidity rumors after the $248 million in outflows in the already nervous crypto market so let’s read more today in our latest Coinbase news.

The rumors surfaced before the weekend started, saying that Coinbase could face liquidity issues after the leaked emails that stated it would suspend the affiliate program. The reports showed:

“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.”

Some of the users took it to Twitter to claim the decision was indicative of the liquidity issues for the top US exchange and Kurt Wuckert Jr even tweeted that the suspension of the affiliate program in combination with other decisions made by the exchange only signifies a liquidity crisis is coming. Around 50% of the stablecoins on Coinbase Pro left the exchange and as per the on-chain data, the total value came to $248 million. The percentage stablecoin outflow was higher on the exchange than on other exchanges like Binance and around 1% of the stablecoin reserves left Binance at the same time but the tokens had a similar value at under $300 million.

When the value of the stablecoins on the exchanges gets compared, the reduction in stablecoins held on the coinbase platform contrasts with binance. Stablecoins hit $1.2 billion on Coinbase but now the value stands at over $284 million. On Binance the value remained in an upward trend since 2019. The data painted a less drastic but it is still a worrying picture compared to the BTC held on the exchanges. Coinbase saw a steady decline in the BTC reserves while Binance increased in the same period.

When other exchanges are included, the Coinbase graph seems to follow the industry trend and the downtrend in BTC held on Coinbase could be following the increased popularity of having crypto in unhosted wallets. Amid the rumors of the crisis at Coinbase, a few analysts called out the ones suggesting the exchange was in trouble. Kraken’s Dan Held noted that coinbase doesn’t have a liquidity crisis while the developers for the affiliate program confirmed that the program removal was not a warning sign.

The community refuted the liquidity issues with some saying that Coinabse has $6 billion in cash and a huge chunk in crypto reserves.