Coinbase addresses rumors of $5,000 withdrawal limit
Cryptocurrency exchange Coinbase has denied rumors that it imposed a $5,000-per-week limit on Bitcoin withdrawals, quashing claims that began circulating on social media.
The speculations took root after a user’s post on X claimed such a limitation on October 24th. The controversial post attracted massive attention, garnering over 250,000 views, with a high engagement rate reflected by its 420 retweets and close to 2,000 likes.
Coinbase promptly addressed the situation, with a spokesperson clarifying that the allegations were baseless and confirmed that no such policy was in place, restricting Bitcoin withdrawals when converting to Coinbase cash balances.
Coincidentally, this rumor surfaced when major crypto exchanges, including Coinbase, saw massive outflows on the same date, with Bitcoin’s price touching the $35,000 mark. Such outflows, historically, are perceived as bullish indicators, hinting at traders moving their assets to safer storage in anticipation of a price hike.
Analytical data from CoinGlass pinpointed Binance as the top exchange witnessing the most considerable outflow of over $500 million within a day. Crypto.com and OKX followed with outflows of $49.4 million and $31 million, respectively.
The recent surge in Bitcoin’s price also led to the liquidation of $400 million worth of short positions, with 94,755 traders experiencing derivative positions being liquidated in the last 24 hours. The largest single liquidation order occurred on Binance, amounting to $9.98 million.
While past market dynamics have often associated extensive outflows with fears of a “bank run”, especially in the wake of events like the FTX collapse, the present scenario seems more aligned with a bullish sentiment. The prevailing trend suggests that investors are in a hoarding mode, anticipating an upward trajectory in asset prices, a behavior often noted during periods of recovery after prolonged market lows.
In the past 24 hours, the total cryptocurrency market capitalization increased by more than 7.3% to reach $1.25 trillion, marking its highest value since April. This sudden upswing is thought to be driven by increased speculation regarding the introduction of a traditional Bitcoin exchange-traded fund (ETF).
Meanwhile, a report from Law360 revealed that the SEC’s decision not to challenge the reversal of its previous rejection of Grayscale Investments’ proposal for a Bitcoin exchange-traded fund suggests that the agency is preparing for the green light on several Bitcoin-related ETFs. An approval of an ETF could inflate the crypto market cap by at least $1 trillion, potentially propelling the price of the cryptocurrency to $73,000.