While analytics firm Nansen released a report pointing to Terra’s collapse fanning the flames of FTX and Alameda Research’s financial troubles, onchain data from intelligence and research firm Glassnode suggests that FTX’s “cracks had already opened in May-June formed”. Glassnode’s report points to a “growing pool of [onchain] data” showing that FTX’s crypto reserves have dropped significantly following Terra’s fallout.
Glassnode report highlights how FTX’s Bitcoin, Ethereum, and Stablecoin balances fell significantly after Terra ecosystem implosion
Many eyes have been on the “FTX Accounts Drainer” address, as the unknown entity has been offloading significant amounts of ether to this day. In addition, on November 5, 2022, FTX’s bitcoin (BTC) wallet contained 20,176.84 bitcoin, and the BTC currently worth $326.43 million disappeared without a trace.
The weekly onchain newsletter from blockchain intelligence and research firm Glassnode explains that FTX’s BTC reserves declined significantly at the end of June. Glassnode also noted that monitoring FTX’s bitcoin reserves was a complex process.
“Tracking the exchange reserves for FTX has been a bit of a challenge for many data providers over the years, with our own experience of FTX using a relatively complex peeling chain system for their BTC reserves,” details from the onchain newsletter of Glassnode. “In April to May of this year, FTX reserves within our cluster had peaked at over 102,000 BTC. This fell drastically by 51.3% at the end of June.” Glassnode’s research report adds:
Reserves have since fallen steadily until they essentially reached zero during this week’s bank run. With claims coming to light that Alameda embezzled client deposits, it indicates that the Alameda-FTX entity actually experienced severe balance sheet deterioration in May and June following the collapse of LUNA, 3AC and other lenders.
Glassnode: ‘A growing pool of Onchain data to suggest cracks had formed as early as May-June’
According to Glassnode’s report, FTX’s bitcoin reserve cache wasn’t the only stash to see significant drops since Terra’s collapse. The researchers indicate that in June, FTX’s ethereum (ETH) reserves fell 55.2% as 576,000 ether left the exchange. When FTX’s financial cracks really started to appear, after Binance’s CEO Changpeng Zhao (CZ) revealed that Binance was dumping all of its FTT tokens, Glassnode said that FTX’s ETH balance fell from 611,000 ETH to 2,800 ETH, taking 99. 5% of its ether reserves were lost.
“As with the bitcoin balance, this leaves almost none [ethereum] in portfolios owned by FTX, with the bank run effectively clearing what was left of the balance sheet,” Glassnode told me.
Stablecoin reserves, Glassnode said, “began to fall significantly from [Oct. 19, 2022], falling from $725 million to virtually zero in the following month. FTX’s stablecoin balances hit new highs in June as the crypto economy took a turn for the worse, the onchain research report notes.
Glassnode’s newsletter says there’s still a lot of ambiguity about the fall of FTX and Alameda, but the onchain data, similar to Nansen’s findings, suggests that problems started to emerge after Terra’s ecosystem imploded. Glassnode researchers conclude:
While significant uncertainty remains about what actually happened between FTX and Alameda, there remains a growing pool of them [onchain] data suggesting cracks had formed as early as May–June. Because of this, the past few months would simply be a harbinger of what was more than likely an inevitable stock market crash.
You can read Glassnode’s weekly onchain newsletter covering the FTX collapse in its entirety here.
What do you think of Glassnode’s onchain analysis of all bitcoin, ethereum, and stablecoins that left the FTX platform after Terra’s collapse? Let us know what you think about this topic in the comments section below.
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