Do Reserves on Cryptocurrency Exchanges Depend Too Much on Their Own Tokens?

The data on reserves has been eagerly awaited by cryptocurrency exchanges. But there are a lot of differences between them, just like there are with other things in the industry.

Too much reliance on the FTT token created by FTX and Alameda ultimately led to its downfall.

Crypto trader John Brown examined the reserves of numerous exchanges. To say the least, what he discovered was rather unexpected.

The analyst used CryptoQuant data to reveal that Bitfinex had the most Bitcoin and Ethereum reserves. More than 90% of the reserve assets held on the exchange are in BTC and ETH.

However, CoinMarketCap (which is owned by Binance) reports slightly different figures. In its newly launched exchange reserves feature, CMC reports that Bitfinex has $7.6 billion in reserves. Instead of 90% BTC and ETH, it reports that 35% is its own LEO token and just 58% in the top two crypto assets.

Brown’s data revealed that Crypto.com had 52% reserves in BTC and ETH. However, CMC reports just 37% in the top two and almost 20% in SHIB. The exchange’s own CRO token tanked on reports that its reserves were heavy on illiquid tokens such as Shiba Inu.

OKX was ranked third for BTC and ETH reserves at 45%, according to Brown’s data. CMC’s figures match this with 25% BTC, 20% ETH, and 48.5% in USDT reserves for OKX.

The big discrepancy was with the world’s biggest exchange, Binance. According to CryptoQuant data, it has just 15% of its reserves in the top two. Binance’s CMC reports just 21.5% of its reserves in BTC and ETH.

Around 41.5% of Binance reserves are in its own BUSD stablecoin and its native BNB coin. However, BUSD is independently issued by Paxos, a fully regulated stablecoin issuer, according to Changpeng Zhao.

As reported by BeInCrypto earlier this month, Binance reserves include around $40 billion in stablecoins (BUSD and USDT).

The breakdown of Coinbase’s reserves was just made public. On November 23, CEO Brian Armstrong disclosed that Coinbase currently possesses almost 2 million Bitcoins, or about $33 billion at today’s values.

At least those worries can be put to rest for this exchange because Coinbase does not have a native exchange token.