Binance, the largest centralized crypto exchange, saw net inflows of $1.2 billion as digital asset investors profited from the sharp market decline caused by the unwinding of yen carry trades.
The rebound in Bitcoin (BTC) and the overall crypto market recovery has led to a surge in trading activity on CEX platforms such as Binance over the past 24 hours. Citing data from DefiLlama, Binance CEO Richard Teng said the crypto exchange recorded its highest daily trading volume since the beginning of the year.
Bitcoin has recovered to $55,000 at press time, up more than 5%, following the global market decline on August 5. The double-digit gain has pushed the cryptocurrency’s market capitalization past the $2 trillion mark once again.
Market leaders Ethereum (ETH) and Solana (SOL) also recouped losses, providing profits to “buy-the-low” investors. Meme coins recorded the biggest gains, with tokens such as BRETT, PEPE, and BONK recording gains of over 10%.
Carry trade unwinding caused crypto market to decline, but economic downturn did not
According to Goldman Sachs, despite speculation of a U.S. recession, the macro-driven impulse buying stemmed from about $20 trillion in Japanese yen carry trades. In this case, carry trades involve borrowing Japanese yen, selling it for other currencies such as the U.S. dollar, and then investing the fiat currency in assets that generate higher yields.
JPMorgan reportedly estimates that monetary easing is only half-done and that further market consolidation is on the horizon.
M2 CEO Stephen Kimmel echoed the analysis of both traditional financial giants. “Markets are recovering and the worst appears to be over, but investors should prepare for continued volatility,” Kimmel said in an email.
As reported by crypto.news, analysts at Bitfinex and on-chain data suggest that Bitcoin could potentially drop back to its recent lows near $48,900. A drop to this level could trigger another market flash before the market resumes a progressive price pattern.
