Binance liquidated its Bitcoin (BTC) reserves in February, locking gains in USDC

On-chain data shows that Binance liquidated some of the Bitcoin (BTC) reserves it accrued through fees and activities. The exchange retains all user balances in hot wallets and cold storage, though the exchange’s reserves have also diminished. 

Binance is taking profits from its Bitcoin (BTC) reserves, accrued through fees and trading activities. It started January with a balance of 46,896 BTC, and liquidated more than 94% of the holdings to end up with 2,747 BTC. 

The exchange also converted a large part of its ETH and SOL holdings into USDC, though it has retained most of its BNB, only selling 16% of the holdings. 

Binance’s corporate reserves are not reported as a separate category. Instead, they make up a part of the excess reserves and are tied to customer funds. The corporate reserves and excess crypto do not take into account any cash, cash-like assets or small-scale holdings outside the scope of the proof of reserves. Binance now holds the smallest amount of excess corporate reserves in two years. 

The exact allocation of the assets remains unknown, as the funds may be held in other wallets, reinvested, or reallocated in another way. Binance has not commented on the allocation, or on using the funds to pay outstanding fines or other claims.

Binance reveals new proof of reserves

The recent liquidations and wallet reorganization followed the latest data for Binance’s proof of reserves. Most notably, the exchange is now 100.45% liquid for BTC reserves, while at one point the reserves reached a much larger excess margin of 108%. Some of the additional BTC earned through activity has moved. 

In early 2025, Binance held a total of 622,192 BTC across custodial services and hot wallets. In February, the reserves declined to 618,653 BTC, of which customer net balances made up 615,816 BTC. The mix of sales and increased user liabilities led to the current lower reserve ratio.

Most of the assets held by Binance have almost no excess reserves. The only outlier is USDC, where the exchange holds reserves in excess of 141% compared to user claims. USDC is becoming more widely adopted as a transparent and regulated token, allowing seamless usage in the Euro area. The stablecoin may see a bigger demand as European brokerages are becoming more restrictive of USDT usage. 

The data on Binance’s reported personal or excess holdings are based on subtracting user balances from the total available balances. Technically, the exchange only has liabilities for 100% of the user balances, though the exchange holds crypto in excess. 

The most recent data shows an outflow for almost all assets, though in some cases Binance moves funds to new wallets and does not immediately reveal its new holdings. The exchange started to share its proof of reserves as a way to reassure customers after the FTX collapse led to revelations that user funds were mixed and used without oversight. 

Binance’s moves may shift market sentiment

The latest data from the proof of reserves shows that Binance was probably selling some of the excess assets at the peak of the market. In total, the exchange sold an estimated $8B out of its $14B in excess assets. 

The significant selling in January led to suggestions that Binance itself was partially responsible for the market weakness, especially for Ethereum. While the exchange has promised to publish its reserves data every month, it has no fixed duty to sustain a certain level of excess.

The recent shift from BTC and blue chip holdings into stablecoins has led to suggestions that the world’s largest crypto exchange is selling at the top, with the intention of re-buying at a lower price. The selling arrives at a time when the market is unwinding the enthusiasm from the late 2024 bull market, showing a mix of reallocation and buying BTC at lower prices.

Binance’s holdings also reflect the shift of users and traders in terms of tokens on several top chains. It increased its token holdings on BNB Smart Chain while retaining a high level of Ethereum-based assets. 

Some chains saw significant outflows, as in the case of Arbitrum. Binance now holds negligible amounts of Arbitrum-based tokens. 

Not all funds on Binance are part of the proof of reserves. The exchange only covers on-chain data for 34 assets with major holdings.

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