Ethereum USDT Sees 1.29B Withdrawn From Exchanges, Biggest Outflow Since February

On-chain data shows a sharp pullback of Ethereum-based USDT, the world's largest stablecoin, from centralized trading venues. Santiment said in a May 9 post on X that roughly 1.29 billion USDT left exchange wallets on Friday, May 8, marking the largest net exchange outflow since February. The estimate is based on changes in the Exchange Flow Balance indicator, which tracks net token movement into and out of centralized exchange addresses. Rising readings typically point to more tokens moving onto exchanges; falling readings indicate net withdrawals. Santiment noted that exchange withdrawals of USDT can be read as a reduction in readily deployable "buying power" for instant crypto purchases, a dynamic often viewed as bearish at face value. The firm added that outflows of this size may instead reflect institutional repositioning, with funds moving into self-custody wallets, DeFi protocols, or OTC desks ahead of larger planned transactions. The analytics firm also pointed to patterns around major outflow spikes. After a 3.72 billion USDT outflow on February 9, Bitcoin saw a brief pullback over the following two weeks before rallying more than 30% in the subsequent months. Santiment said the key variable now is whether USDT returns to exchanges soon. Renewed inflows in the coming days would suggest capital is being readied for deployment into crypto assets. As of publication, total crypto market capitalization is about $2.66 trillion, up nearly 4% over the past week.