Bybit releases a $100M fund to support crypto market makers
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Bybit, one of the leading cryptocurrency trading platforms, has created a $100 million support fund. The company has said that it plans to provide additional protection to clients during a tough period for the cryptocurrency sector.
Bybit sets up a $100M fund to support crypto market makers
Institutional clients and the market makers on the Bybit platform will receive up to $10 million in support. The release of this fund by Bybit follows a similar announcement by Binance. Binance, the largest exchange by trading volumes, also announced it would set up an industry recovery fund.
The creation of these funds aims to mitigate the adverse effects caused by the collapse of the FTX cryptocurrency exchange. The ripple effects of the FTX collapse are still being felt, with other crypto firms that had exposure to the collapsed exchange, including BlockFi and Genesis, halting withdrawals.
The CEO and co-founder of Bybit, Ben Zhou, commented on the creation of this fund, saying that everyone in the crypto industry needed to come together and make an effort to support the industry.
The collapse of the FTX exchange led to crypto investors losing faith in the cryptocurrency exchange. These crypto firms are now trying to regain this trust, given that they generate most of their revenues from trading activities. Bitget, another crypto firm, also announced a $300 million investor protection fund.
Crypto exchanges start releasing proof of reserves
Besides launching funds that will protect customers and other stakeholders in the industry, exchanges have also been releasing proof-of-reserves to guarantee customers that they have enough cryptocurrency assets in their vaults to maintain their solvency and ensure that they continue to operate smoothly.
Proof-of-reserves are audits of the finances of a cryptocurrency exchange. These audits are conducted by independent companies. The majority of cryptocurrency exchanges have announced that they will be releasing proof-of-reserves. These exchanges include Binance, Crypto.com, and Kraken.
However, there is widespread panic in the market because of the bearish trend that has persisted in the cryptocurrency market this year. The collapse of Terra Luna, Voyager, Celsius, and now FTX has seen crypto investors turning their attention to self-custody.
A recent report by Glassnode estimated that 172,700 Bitcoins were leaving exchanges every month. This was the highest rate to date. The number is even higher than in 2020, when the pandemic hit and caused a significant price crash.
