Crypto Exchange Huobi Experiences Heavy Token Outflows: Nansen

Traders may be skeptical about the continued health of Huobi, on-chain data indicates.

The exchange, which saw turbulent trading in the Asia hours for its HT token after it confirmed a 20% headcount reduction, has experienced outflows of $64 million in the past 24 hours. This brings its weekly outflow count to over $100 million, according to Nansen data, and compares with $22 million at rival Kraken.

Nansen notes that the highest outflows came from stablecoins USDT, USDC and ether (ETH) wallets that had high balances.

2/ Top withdrawals are mainly in $USDT, $USDC, $ETH from wallets with high balances, incl. a 🤓 Smart LP pic.twitter.com/SpLitXrUfJ

— Nansen 🧭 (@nansen_ai) January 6, 2023

Huobi’s stablecoin balance currently sits at $681 million, down 9.5% in a week, the data show. A sharp increase in outflows of stablecoins from FTX occurred before that exchange collapsed last November.

“Huobi seems to be very vulnerable at the moment,” said Ki Young Ju, CEO of analytics firm CryptoQuant.

Ju noted that Huobi’s bitcoin (BTC) reserves are down 90% in the past year while Binance’s have more than doubled. Huobi’s active user addresses have dropped significantly too, according to CryptoQuant.

"Huobi’s user activeness dropped 44x lower from the peak in May 2019, and 20x lower than Binance as of 3rd Jan., 2023," it said in a report shared with CoinDesk.

Of particular concern during this stress test is the health of the Huobi token (HT).

As CryptoQuant pointed out in a recent report, of all the exchanges, Huobi has what it calls the "dirtiest" reserves, being the most reliant on its exchange token. OKX and Deribit have the cleanest, it said.

Nansen notes that Huobi holds 81% of the circulating supply, or 131.6 million out of 162.2 million, of the HT token.

According to CoinGecko data the token had a 24 hour trading volume of only $21 million compared with a market cap of $770 million.

Its +2% bid depth also remains comparatively narrow, according to CoinGecko data, when compared with other tokens of a similar market cap. In a recent column, Kaiko’s director of research, Clara Medalie, pointed out that the lack of 2% bid depth was a major red flag for FTX’s FTT token.

Meanwhile, on-chain research house Look On Chain, said Justin Sun, who sits on Huobi's advisory board, cashed out $100 million in USDC and USDT from Binance.

Huobi’s key to success is to "Ignore FUD and Keep Building," he tweeted.