I was doing my due diligence for exchange when I came across something shocking. Defillama offers data on something they call CEX transparency which tracks the total reserves of exchanges as well as the 24hr, 7D and 1M flows of funds into or out of exchanges.
Most of here should already know that crypto trading is drying up both as there is less interest in the sector as well as many traders simply buying and moving assets off the exchange to cold storage. Since around August, around 2 Billion in BTC has been removed from exchanges. This number rises to over 6 Billion since mid-2023.
This all obviously means that crypto trading fee revenues take an extreme hit. And not just this, but any exchange that are not fully backed by real non-manipulated tokens will crumble. I'm not saying that any exchange I mention is doing so, just pointing out the phenomenon.
But to my main point, Defillama shows that Bitstamp has lost 19% of reserves and Bitmex has lost 9% of reserves. Interestingly, two of these exchanges are pretty old as far as exchanges go and have a decent name as far as crypto exchanges go. So of any random crypto exchange, these exchange have a higher chance of surviving if only based on their reputation. But that does not mean they are immune. You may simply experience less severe issues as lack of customer service or bugs and issues trading on the platforms as they downsize their staff.
There's also CoinW who lost a third of their reserves:
I can't say I know must about them but with almost 10 Million on reserves, there are a bunch of people with money here.
And far from these exchanges, the crypto Cefi crunch will surely affect more that these two so be aware in general.