Amid bankruptcy rumors, leading exchange Gate.io is holding trillions of Shiba Inu (SHIB) tokens worth millions of dollars. Is this a concern for altcoin?
Gate.io is holding a staggering amount of this altcoin
Gate.io, the popular crypto exchange platform, is facing bankruptcy rumors. Prominent market tracker Lookonchain highlighted the staggering amount of Shiba Inu (SHIB) coins held on Gate.io in a recent tweet. The tweet highlights the exchange’s updated crypto assets. Accordingly, it revealed a substantial sum of $1.44 billion distributed across six wallets. Among the listed assets, Shiba Inu stood out as one of the leading exchange assets with more than 6 trillion SHIB tokens worth approximately $52 million.
Due to the drop in GateToken price and bankruptcy rumors, we updated the assets of @gate_io.
6 wallets hold a total of $1.44B in assets.
Including:
97M $GT($434M)→ 30%
149,648 $ETH($279M)→ 19%
182M $USDT→ 13%
2,612 $BTC($70M)→ 5%
6T $SHIB($52M)→ 4%
…Hope it helps you. pic.twitter.com/QkXgidvuBn
— Lookonchain (@lookonchain) June 1, 2023
The news of Gate.io’s alleged financial instability is still new. This has raised concerns among its users and the wider crypto community. The fact that SHIB continues to be an important part of the exchange’s asset portfolio has raised questions about the potential impact on the value of the SHIB token. Reports of Gate.io’s impending bankruptcy follow Hotbit’s decision to terminate its centralized exchange services. Shiba Inu investors have been advised to withdraw their holdings from the stock market before June 21.
Leading exchanges also have large SHIB holdings
Most of the largest exchanges hold substantial SHIB due to the sheer size of Shiba Inu traders on their platforms. Earlier this year, cryptocoin.com We have reported the updated number of SHIB tokens held on Binance. The report showed that Binance owns more than ten times the amount of SHIB on Gate.io. Notably, Binance controls 78.5 trillion SHIB worth $663,000,000 following a report on revised Proof of Reserve data.
Similarly, the amount of Shiba Inu on Crypto.com is also interesting. Because SHIB tokens make up a more significant percentage on the platform than Ethereum (ETH) tokens. The exchange has over $558 million in SHIB. In addition, Uphold’s Shiba Inu balance stands at a more modest 921 billion SHIB.
Shiba Inu’ Or is the interest waning?
During the 2021 bull market, the meme coin Shiba Inu received a lot of attention. Accordingly, the altcoin led price rallies. This surge in popularity has brought Shiba, the native decentralized exchange (DEX) of the Shiba Inu ecosystem, to an astonishing Total Locked Value (TVL) of $1.75 billion. However, the same TVL that was once expressed in billion-dollar figures has drastically dropped. According to DefiLlama, ShibaSwap’s TVL is currently at a rather meager $25.16 million.
This sharp decline points to a lack of investor interest in raising volume for smart contract projects in the Shiba Inu ecosystem. Liquidity crunch occurs when there is a shortage of deposits and conversions in transactions within a given digital asset. Sometimes this can be attributed to the lack of participation by influential investors, often referred to as whales. By analyzing on-chain data, Santiment, a leading analytics platform, discovered that individual investors holding between 1 and 1,000,000 SHIB tokens increased their balances. This shows that this group still has some faith in SHIB’s long-term performance.
Addresses that hold between 1,000,000 and 1,000,000,000 tokens have significant decreases in balances. This indicates an increasing belief that the SHIB can no longer perform. While SHIB has seen occasional spikes, overall the metric has declined. At the time of reporting, SHIB’s trading volume stands at a modest $75.18 million.
In addition to the Shiba Inu’s liquidity crunch, another cause for concern comes from the recent increase in sedentary circulation. While sedentary circulation has remained minimal over the past 365 days, Santiment’s data reveals a relatively frequent increase over the past 90 days. The analytics platform’s findings show that SHIB’s dormant circulation reached trillions between March and today.
