Exchange balances show a massive shift from BTC/ETH toward stablecoins, a clear signal of risk aversion affecting retail and institutional traders operating on Gate.io and Bybit. According to the platforms’ Proof of Reserves snapshots, USDT reserves rose ~27.9% while BTC and ETH recorded declines in their holdings, which matters for liquidity, treasury management and product.
The data published by the platforms themselves indicate synchronized movements. Bybit recorded a 3.13% contraction in Bitcoin and a 5% drop in Ethereum, alongside a 27.89% increase in Tether (USDT) balances. Gate.io showed a similar decline in BTC and ETH and the same 27.89% rise in USDT.
In addition, Gate.io reported total reserves of $11.676B and a global reserve ratio of 124% as of October 28, 2025, according to its public snapshot.
Proof of Reserves is a mechanism that publishes an exchange’s holdings to verify solvency and asset composition. These snapshots allow tracking not only solvency but also users’ capital allocation: the shift toward stablecoins reduces pressure on leveraged positions and alters liquidity availability for spot and derivatives markets.
What data says about Gate.io and Bybit
The observed pattern suggests the market is prioritizing liquidity and capital preservation over exposure to volatile assets. For product managers and compliance teams, this implies reviewing risk limits, margins and liquidation mechanisms in the face of greater concentration in USDT.
Increased USDT balances can raise apparent liquidity but concentrate counterparty risk in the stablecoin. While the demand for stablecoin-based products (fast withdrawals, trading pairs) may rise, forcing operational adjustments.
The most immediate signal to follow are the upcoming Proof of Reserves snapshots and the evolution of USDT balances in November: those data will confirm whether the rotation into stablecoins is temporary or the start of a sustained reevaluation of risk appetite in the crypto market. For compliance and product, the decision roadmap should prioritize reviewing limits, liquidity and controls over stablecoin flows.
