Surge in Binance Net Inflows Following Bybit Security Breach

In the aftermath of the Bybit hack, Binance witnessed a substantial net inflow of $3.9 billion over just a week. For February, the total net inflows reached an impressive $5.32 billion, highlighting a significant shift in trader confidence and demand amid prevailing market uncertainties.

Prior to the hack, Bybit was ranked as the second-largest cryptocurrency exchange based on 24-hour trading volume, but it has since plummeted to the eleventh spot.

Transfer of Traders to Binance

The Bybit hack, which occurred on February 21, marks the largest theft in the cryptocurrency realm to date, with ramifications that continue to unfold. The notorious Lazarus Group, identified as the perpetrators of the breach, has reportedly laundered the entire sum of $1.5 billion in stolen assets.

While Bybit has faced significant losses as a result of the hack, Binance has emerged as a surprising beneficiary in the wake of the crisis.

Post-hack analyses reveal that Binance recorded over $3.9 billion in inflows during the week following the security incident, contrasting sharply with the massive outflows experienced by Bybit. Prior to this event, Binance was already the leading cryptocurrency exchange globally by daily trading volume, closely followed by Bybit.

However, in the wake of the hack, Bybit's position has weakened drastically, now ranking at eleventh place.

“Since the hack, we have seen an unprecedented number of withdrawal requests, totaling over 350,000, with about 2,100 of those still awaiting processing. More than 99.994% of withdrawal requests have been successfully completed,” stated Ben Zhou, CEO of Bybit, on the day of the breach.

For the entirety of February, Binance's net inflow stood at $5.32 billion, with the bulk of this amount materializing immediately after the Bybit hack.

This suggests that Bybit's customer base is dwindling, as traders increasingly turn to Binance for stability and reliability. Binance's inflows saw peaks of nearly $9.3 billion back in November, indicating a strong market presence.

Binance is solidifying its dominance as the largest centralized exchange, effectively addressing regulatory challenges and compliance issues that have surfaced over the past two years. Recently, the exchange has taken proactive measures, such as delisting Tether's USDT and other stablecoins not compliant with MICA regulations in Europe. They also resumed USD deposits in their American branch, Binance.US, nearly two years post-DOJ charges.

The Bybit hack sent shockwaves throughout the industry, yet it appears to have bolstered user interest in Binance, which now faces little direct competition.