Huobi Token (HT) has emerged at the center of insolvency rumors following a shocking performance on Thursday. Following the plunge in the general crypto market, Huobi Token took it a step further with a massive 90% drop in just a matter of minutes. Now crypto community members are on edge, wondering if the crypto exchange would be the next to go under.
Huobi Token (HT) Takes A Massive Dump
Before the news of the U.S. Attorney General suing KuCoin crypto exchange made the rounds, HT was trending at a price of $4.4 and remained steady. However, as the market declined, HT fell to as low as $0.3, an over 90% decline, before rallying back up to $3.5.
Its decline placed it among the top losers in the market, coming behind Singularity Net (AGIX) which lost 21.74% of its value in the 24-hour period. HT’s market cap also took a hit during this time, falling over 20% to be sitting at $619.7 million.
As a result, Huobi Token has now fallen to 67 on the list of top cryptocurrencies by market cap. However, its trading volume is up a whopping 363% in the last 24 hours, which brings it to its current level of $58 million.
HT price recovers after losing more than 90% | Source: HTUSD on TradingView.com
Is Huobi Exchange Insolvent?
Although the Huobi Token was able to regain most of its lost value, the damage had already been done. The flash crash triggered a number of rumors across the crypto community and rumors that the exchange is insolvent spread really fast.
In response, Tron founder Justin Sun sent 100 million USDC to the exchange to provide more liquidity. He also debunked the rumors that the exchange is insolvent and attributed the flash crash to the “impact of the leveraged liquidation on the market caused by a few users.”
Nevertheless, this has not done much to sway opinions about the health of the exchange, and with good reason. The chart below from early 2023 shows that while Binance saw an increase in its quarterly estimated revenue since 2021, Huobi has seen a 98% decline in its quarterly estimated revenue, 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 being insolvent could have devastating effects on the crypto market, especially now. It may not be as big as FTX but the current bearish climate around the market would likely push the market farther down if Huobi were to be declared insolvent. An occurrence that Justin Sun and the execs at the company seem to be trying hard to prevent.
In all of this, it is important to remember the golden rule of cryptocurrency investing, which is “Not your keys, not your coins.” It is better to be safe than sorry, so moving coins off centralized exchanges and into self-custody wallets is advisable regardless of the outcome.