Binance logged $1.2b inflows as crypto markets bounces back

Binance, the largest centralized exchange for cryptocurrencies, saw net inflows of $1.2 billion as digital asset investors took advantage of a major market decline amid a decline in yen carry trades.

Bitcoin’s (BTC) recovery and the broader cryptocurrency market rally have boosted trading activity on CEX platforms like Binance over the past 24 hours. Citing DefiLlama data, Binance CEO Richard Teng said the crypto exchange recorded its highest single-day trading volume since the beginning of the year.

Amidst the macroeconomic climate and the market decline experienced yesterday, #Binance Net inflow of USD 1.2 billion was recorded in the last 24 hours @DefiLlama‘s CEX Transparency metrics.

This is one of the highest net inflow days of 2024, with strong investor…

— Richard Teng (@_RichardTeng) August 6, 2024

Bitcoin is up more than 5% to $55,000 by press time following a global market crash on Aug. 5. The double-digit gains have pushed the total value of the cryptocurrency market back above $2 trillion.

Market leaders Ethereum (ETH) and Solana (SOL) also pulled back losses, providing profits for “buy the dip” investors. Memecoins emerged with one of the biggest rallies as tokens like Brett (BRETT), Pepe (PEPE), and Bonk (BONK) posted 10%+ gains.

It’s not a recession that’s causing crypto markets to crash as carry trade pulls back

Despite speculation of a recession in the U.S., the macro-driven impulse flow was driven by about $20 trillion of Japanese yen-carry trades, according to Goldman Sachs. In this case, a carry trade involves borrowing yen and selling it for other currencies, such as the U.S. dollar, and then investing that fiat currency in higher-yielding assets.

JPMorgan reportedly predicted that the unraveling was only halfway complete and that there could be more turmoil in the market.

M2 CEO Stefan Kimmel echoed the analyses of both traditional finance giants. “While markets are recovering and the worst appears to be behind us, investors should be prepared for continued volatility,” Kimmel said via email.

As Crypto.news reported, Bitfinex analysts and on-chain data suggest that Bitcoin could return to recent lows around $48,900. A drop to these levels could trigger another market dump before markets resume their gradual price patterns.