$60M worth of token has left from Houbi in one day

Key points: 

• Huobi exchange saw turbulent trading in its HT token during the Asian session, with $64 million in outflows over the past 24 hours, after confirming a 20% layoff.
• That has resulted in weekly outflows of more than $100 million.
• Justin Sun, founder of the Tron blockchain and a member of Huobi’s advisory board, donated $100 million to the exchange.
• Huobi’s Bitcoin reserves have fallen by 90% over the past year, while Binance’s reserves have more than doubled during that time.
• CryptoQuant said Huobi has the “dirtiest” reserves of any exchange because it relies on its exchange token. OKX and Deribit are the cleanest, they say.
• Nansen noted that Huobi holds 81% of the circulating supply or 131.6 million of the 162.2 million HT tokens.

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On-chain data suggests traders may be skeptical about Huobi’s continued health.

The exchange saw turbulent trading in its HT token during the Asian session, with $64 million in outflows over the past 24 hours, after confirming a 20% layoff. That has resulted in weekly outflows of more than $100 million, compared with $22 million for rival exchange Kraken, according to Nansen data.

Multichain token value by the exchange. Source - Nansen 

Nansen noted that the highest outflows were from stablecoins USDT and USDC, as well as high-balance ether (ETH) wallets.

Meanwhile, cryptocurrency entrepreneur Justin Sun, founder of the Tron blockchain and a member of Huobi’s advisory board, donated $100 million to the exchange. On-chain research firm Look On Chain said that a wallet historically tagged Sun had withdrawn $100 million in USDC and USDT from Binance, and Etherscan data showed that the funds had been transferred to Huobi.

"The key to Huobi’s success is to “ignore the FUD and keep building”

Sun tweeted, using the acronym Fear, Uncertainty, and Doubt.

Before the inflows, Huobi’s stablecoin balance was $681 million, down 9.5% for the week, according to Nansen data. Stablecoin outflows from FTX rose sharply before the exchange’s collapse in November.

"Huobi seems to be very vulnerable right now," said Ki Young Ju, chief executive of analytics firm CryptoQuant.

Ju noted that Huobi’s Bitcoin (BTC) reserves have fallen by 90% over the past year, while Binance’s reserves have more than doubled during that time. According to CryptoQuant, Huobi also saw a significant decrease in active user addresses.

“Huobi’s user activity has dropped 44x since its peak in May 2019 and is 20x lower than Binance since Jan. 3, 2023,” CryptoQuant said in a report.

Of particular concern in this stress test is the health of Huobi’s HT token.

Last month, CryptoQuant said Huobi has the “dirtiest” reserves of any exchange because it relies on its exchange token. OKX and Deribit are the cleanest, they say.

Nansen noted that Huobi holds 81% of the circulating supply or 131.6 million of the 162.2 million HT tokens.

Circulation supply of Huobi tokens. Source - Nansen

According to CoinGecko data, the token’s 24-hour trading volume is just $21 million compared to a market cap of $770 million.

The +2% bid depth is also relatively low compared to other coins with a similar market cap, according to CoinGecko. In a quarterly market report, Clara Medalie, head of research at data provider Kaiko, said the lack of 2% bid depth is a key red flag for FTX’s FTT token.