Reserve reports from major exchanges Gate and Bybit clearly show that risk appetite is deteriorating as traders flee volatile cryptocurrencies for stablecoins.
Users’ holdings of Bitcoin and Ethereum on Bybit declined significantly in October, but USDT balances rose nearly 28% as interest rate cut expectations faded and market volatility increased.
Bybit’s latest Proof of Reserves snapshot (dated October 22nd) shows that users BTC Coins held were approximately 64,000 coins, a decrease of 3.13% or 2,068 BTC from the September tally.
Ethereum The holdings decreased even more rapidly, by 5% to 542,200 ETH, a loss of 28,549 coins.
Meanwhile, users’ USDT balance increased by 27.89% to approximately 6,389 million, an increase of 1,393 million.
The outflows from risk assets came as Bitcoin hovered around $108,000 and Federal Reserve Chairman Jerome Powell signaled a gradual path to policy easing.
Despite asset shifts, exchanges maintain high reserve ratios
Despite changes in the composition of user holdings, both platforms reported healthy reserve coverage ratios.
Bybit maintained a 103% Bitcoin reserve ratio and a 101% Ethereum reserve ratio, ensuring wallet balances exceeded user debt across all major tokens.
USDT’s reserves reach 110%, reflecting the platform’s ability to meet surging stablecoin demand during safe flight.
Gate released figures showing total reserves as of October 28th at $11.676 billion, with an overall reserve ratio of 124%.
BTC reserves were 24,833 coins against a user balance of 18,537, and the excess reserve ratio increased from 33.48% to 33.96%.
ETH reserves increased to 419,096 tokens, and the excess rate increased from 23.58% to 25.93%. USDT reserves will increase to approximately 1.58 billion, covering user holdings of approximately 1.33 billion with a buffer of 18.74%.
The reserve ratios of altcoins including GT, DOGE, and XRP all exceeded 100%, reaching 150.98%, 108.12%, and 116.66%, respectively.
According to the company, Gate’s reserves currently cover nearly 500 types of user assets and use Merkle trees and zk-SNARKs algorithms for validation.
Market pressure increases as whales move coins and retail declines
Bitcoin fell below $108,000 early Monday, extending the risk reset that accelerated late last week.
The decline was in October.UptoberTraders are currently reframing this story as follows.red octoberFor November.
Ether fell 3.8% to $3,737, XRP fell 3.1% to $2.43, and the cryptocurrency market cap fell 3.1% to $3.69 trillion.
According to a report by Crypto News, intraday volatility increased during the early hours of Asian time due to thin holiday trading due to a public holiday in Tokyo.
Bitcoin fell below $108,000 in early Asian trading, raising traders’ caution as hopes for Fed interest rate cuts faded and Powell’s cautious approach to policy in December ended the “uptober” streak.#bitcoin #CryptoMarket https://t.co/5jdPnMu9ZA
— Cryptonews.com (@cryptonews) November 3, 2025
The increased leverage built up by October made long positions vulnerable, and forced liquidations drove down spot levels as prices fell.
Traders pointed to waning confidence in the acceleration of the easing cycle and a strong dollar as direct contributors to the plunge.
Large holders increased selling pressure.
According to Cryptonew’s latest report, Lookonchain’s on-chain data shows that the pseudonymous whale BitcoinOG has deposited approximately 13,000 BTC (worth $1.48 billion) into Kraken since October 1, including 500 BTC on November 2.
Early adopter Owen Gunden transferred 3,265 BTC (worth $364.5 million) to Kraken since October 21, reinvigorating the wallet after years of dormancy.
Another Bitcoin OG known for shorting Bitcoin during big swings is said to have made nearly $197 million by timing the October 11 crash.
Participation in retail trade continued to decline significantly. According to CryptoQuant data, daily inflows into Binance from small holders have collapsed from around 552 BTC at the beginning of 2023 to just 92 BTC now, a decline of more than 80%.
The 90-day moving average has fallen by more than five times since the launch of spot ETFs in January 2024, as individual investors have moved to ETF products or held them for the long term, allowing institutional investors and corporate financial strategies to dominate market trends.
However, in the face of sustainability challenges, organizational ambition also appears to be selective. “If a digital asset treasury company trades below its NAV, it is not a bubble bursting, but rather an inability of the market to price the infrastructure during a phase transition.” said Eva Oberholzer, Chief Investment Officer at Ajna Capital.
“This is exactly what happened with Internet infrastructure companies in 2001.” He pointed out that public stock markets price digital asset treasury companies based on current cash flows.
He added that strategic buyers are setting prices based on future utility value, currently creating a systematic undervaluation. The pattern is reminiscent of PayPal trading below its cash value in 2002 and then soaring 400% within 18 months.
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