Huobi Token (HT) has emerged amid rumors of insolvency after a dismal performance on Thursday. After plunging into the public crypto market, Huobi Token took a step further with a massive 90% drop in just a few minutes. Now members of the crypto community are on edge, wondering if crypto exchanges will be next.
Huobi Token (HT) Takes Massive Dump
Before the news of the US Attorney suing crypto exchange KuCoin made the rounds, HT was trending at $4.4 and holding steady. However, as the market declined, HT fell to $0.3, down more than 90%, before rebounding to $3.5.
The drop put it among the top losers in the market, behind Singularity Net (AGIX) which lost 21.74% of its value in 24 hours. HT’s market cap was also hit during this period, falling more than 20% to $619.7 million.
As a result, Huobi Token has now dropped to 67th in the list of top cryptocurrencies by market cap. However, its trading volume has increased by 363% in the last 24 hours, which brings it to the current level of $58 million.
HT price recovers after losing more than 90% | Source: HTUSD on TradingView.com
Is Huobi Exchange Insolvent?
Even though Huobi Token has managed to regain most of its lost value, the damage has already been done. The flash crash caused several rumors in the crypto community and rumors that the exchange was bankrupt spread quickly.
In response, Tron founder Justin Sun sent 100 million USDC to the exchange to provide more liquidity. He also denied rumors that the exchange went bankrupt and caused a flash crash due to “the impact of the liquidation used in the market caused by some users.”
However, this has not led to many opinions on the health of the exchange, and with good reason. The chart below from the beginning of 2023 shows that while Binance has seen an increase in monthly revenue since 2021, Huobi has experienced a 98% drop in monthly revenue estimates, which could mean that the crypto exchange could be in trouble.
Huobi quarterly revenue declines 90% | Source: CryptoQuant
The implications of a crypto exchange the size of Huobi going bankrupt could have a devastating effect on the crypto market, especially today. It may not be like FTX but the current bearish climate in the market will probably push the market further if Huobi will be declared bankrupt. An incident that Justin Sun and executives at the company seem to be trying very hard to prevent.
In all of this, it’s important to remember the golden rule of cryptocurrency investing, which is “Not your keys, not your coins.” It’s better to be safe than sorry, so moving coins off centralized exchanges and into self-sustainable wallets is recommended regardless of the outcome.