Binance Records Highest BTC Outflows In its History; What’s the Catch?

The latest report by on-chain tracker Whalewire shows Binance is experiencing unusual Bitcoin outflows over the past 24 hours, the highest in its history. Whalewire reported that over 162,000 BTC, worth more than $4.5 billion, left the exchange in a day.

The tracker believes something fishy is ongoing with Binance, as the crypto exchange has halted withdrawals three times today and has been offline for several hours. According to Whalewire, Bitcoin volume has plunged over 65% over the last 30 days.

Binance, the largest cryptocurrency exchange, has been relatively stable and resilient amid several ups and downs in the crypto industry. However, the recent observation leaves one speculating if something fishy is going on with the exchange.

BREAKING: #Binance outflow data confirms largest withdrawal in it's history, over 162,000 $BTC has left the exchange, valued at over $4.6 Billion.

Are Whales/Insiders jumping ship? pic.twitter.com/QSXYAEvHkt

— WhaleWire (@WhaleWire) May 7, 2023

Whalewire has called attention to the latest on-chain data recorded on CryptoQuant. The data shows Bitcoin outflow on Binance reached an all-time high of 162,000 BTC worth over $4.5 billion following current prices.

Related Reading: Bitcoin Block 788695: The Day Transaction Fees Took The Crown

The data appear disturbing, as it could cause fear, uncertainty, and doubt, triggering massive price slumps across the market. 

However, some respondents said Binance might be moving the coins to cold storage, while others blamed it on network congestion. 

Binance also confirmed this in a tweet posted about four (4) hours ago to reassure that it is aware of the large outflow recorded by some on-chain trackers. The exchange clarified that it moved Bitcoin from hot to cold wallets due to Bitcoin address adjustments.

We’re aware that some data are showing a large volume of outflows from #Binance.

This ‘outflow’ are actually movements between Binance hot and cold wallets due to the BTC address adjustments.

— Binance (@binance) May 8, 2023

True to Binance’s reasons for the massive outflows, the Bitcoin network is experiencing issues, resulting in congestion and high fees. 

According to a crypto enthusiast with a Twitter account @CryptoTea, Alexa, there are over 400,000 pending transactions on the Bitcoin network.

Crypto Tea claimed the Bitcoin network witnessed an exploit that allowed people to upload useless data to the blockchain. According to Crypto Tea, one person alone uploaded 10,000 pictures of monkeys to the Bitcoin blockchain, increasing the number of nodes by 1.4 GB. Now, the network memory use has reached 1 GB above a 300 MB limit.

However, another Bitcoin enthusiast has discounted the rumor that Bitcoin was the subject of an attack, saying that the increased usage due to the BRC-20 meme coins was the reason for the congestion.

The discrepancy caused congestions that led Binance to move BTC into cold wallets, halting withdrawals while the issues get resolved. It’s still uncertain how this issue will affect Bitcoin, but its price is 3.29% down in the last 24 hours.

Featured image from Pexels and chart from Tradingview.com