Bybit’s December Data Reveals a Quiet Rotation From Bitcoin to USDT — What Traders Are Really Doing
Bybit Proof of Reserves Shows Users Shift From Bitcoin and Ethereum Into Stablecoins
Crypto exchange Bybit has released its latest Proof of Reserves report, offering a detailed snapshot of how user assets were positioned in mid-December. The disclosure, dated December 17 and marking Bybit’s 29th reserves report, highlights a notable shift in user behavior: balances of Bitcoin and Ethereum declined, while stablecoin holdings rose sharply.
The report compares user account balances with on-chain wallet data, aiming to demonstrate that customer assets are fully backed. While reserve ratios across major assets remained above 100 percent, the changing composition of user holdings provides insight into market sentiment as 2025 draws to a close.
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| Source: XPost |
Bitcoin and Ethereum Holdings Decline
According to the data, user-held Bitcoin balances stood at approximately 63,200 BTC at the time of the snapshot. That figure represents a month-over-month decline of around 5.49 percent compared with the previous report dated November 19. In absolute terms, users reduced their Bitcoin exposure by roughly 3,674 BTC.
Ethereum holdings followed a similar trajectory. User balances fell to about 536,800 ETH, marking a decline of approximately 6.67 percent over the same period. This translates to a reduction of more than 38,000 ETH held on the platform.
Such moves are not uncommon toward the end of the year. Market participants often rebalance portfolios in December, locking in gains, reducing exposure to volatility, or positioning capital for new opportunities in the coming year. The relatively modest declines in Bitcoin and Ethereum suggest a gradual adjustment rather than panic-driven selling.
Analysts note that periods of consolidation or reduced volatility frequently coincide with lower demand for directional exposure. Instead of aggressively buying or selling, traders may prefer to step back and wait for clearer signals, particularly when macroeconomic conditions remain uncertain.
Stablecoin Balances Rise Sharply
While holdings of major cryptocurrencies declined, stablecoins moved decisively in the opposite direction. Bybit reported that user-held Tether balances climbed to approximately 6.05 billion USDT, an increase of about 8.13 percent from the previous snapshot. In nominal terms, that represents an inflow of roughly 455 million USDT.
Another stablecoin, USDE, recorded even stronger growth. User balances rose by more than 15 percent to reach around 472 million units. Although USDE is smaller in scale compared with USDT, its growth rate underscores the broader trend toward stable-value assets.
Stablecoins play a crucial role in crypto markets. They allow traders to remain within the digital asset ecosystem without being exposed to the price swings of volatile tokens. During periods of uncertainty, many investors rotate into stablecoins as a way to preserve capital while maintaining liquidity.
The surge in stablecoin balances on Bybit suggests that users are adopting a more cautious stance. Rather than exiting the market entirely, they appear to be parking funds in assets designed to maintain a consistent value, ready to be redeployed when conditions improve.
Reserve Ratios Remain Above 100 Percent
Despite the shift in asset composition, Bybit reported that reserve ratios across major tokens remained comfortably above 100 percent. This means the exchange holds more assets in its wallets than users collectively own, providing an additional buffer.
For Bitcoin, the reserve ratio stood at approximately 103 percent. Ethereum reserves also exceeded the full-backing threshold, as did USDT holdings. Several altcoins posted even higher coverage levels, with some reserve ratios reaching 120 percent or more.
Proof of Reserves reports gained prominence across the industry following a series of high-profile exchange collapses in recent years. The disclosures are designed to increase transparency by allowing users to verify that their assets are fully backed by on-chain holdings.
Bybit emphasized that customers can independently compare reported user balances with publicly visible wallet addresses. This approach aims to reassure users that the platform maintains adequate reserves and does not rely on fractional backing.
What the Data Says About User Behavior
The December report points to a shift in sentiment rather than signs of stress. There were no indications of large-scale withdrawals, liquidity shortages, or reserve gaps. Instead, the data reflects a methodical reallocation of assets.
Lower Bitcoin and Ethereum balances suggest that some users reduced exposure to price fluctuations, possibly in response to muted market momentum or expectations of near-term consolidation. At the same time, the increase in stablecoin holdings indicates a preference for flexibility and risk management.
This pattern aligns with broader market behavior observed during periods of uncertainty. Traders often move into stablecoins when they anticipate sideways price action or when macroeconomic factors cloud the outlook for risk assets.
Importantly, the report does not suggest a loss of confidence in the exchange itself. Reserve ratios remained strong, and the changes in asset mix appear driven by strategic choices rather than concerns about solvency.
Broader Market Context
The timing of the shift is notable. December is traditionally a month of lower trading volumes, as institutional participants wind down activity and retail traders take a step back. In such an environment, even modest changes in sentiment can lead to visible shifts in asset allocation.
At the same time, global markets have been grappling with questions around interest rates, inflation, and economic growth. These factors influence risk appetite across asset classes, including cryptocurrencies.
Within the crypto sector, Bitcoin and Ethereum often serve as barometers of broader sentiment. When confidence is high, investors tend to increase exposure to these assets. When caution prevails, stablecoins often see inflows as traders wait on the sidelines.
Bybit’s latest Proof of Reserves report captures this dynamic in real time, offering a window into how users are positioning themselves ahead of the new year.
Transparency and Trust After Industry Turmoil
Proof of Reserves disclosures have become a key trust-building tool for centralized exchanges. By publishing regular snapshots and inviting users to verify on-chain data, platforms aim to differentiate themselves in an industry still recovering from past scandals.
Bybit has been publishing these reports consistently, and the latest edition reinforces the message that user assets remain fully backed. While Proof of Reserves does not capture every aspect of an exchange’s financial health, it provides an important layer of transparency.
Industry observers caution that reserves alone do not tell the full story. Liabilities, governance practices, and risk management frameworks also matter. However, maintaining reserve ratios above 100 percent is generally viewed as a positive signal.
Looking Ahead to Early 2026
As markets transition into early 2026, user behavior may shift again. Much will depend on macroeconomic developments, regulatory signals, and momentum within the crypto market itself.
If volatility returns or bullish narratives regain traction, some of the capital currently parked in stablecoins could rotate back into Bitcoin, Ethereum, or other digital assets. Conversely, prolonged uncertainty could reinforce the defensive positioning seen in December.
Bybit’s next Proof of Reserves report will offer further insight into whether this trend persists or reverses. For now, the data suggests a market in wait-and-see mode, with users prioritizing liquidity and capital preservation over aggressive risk-taking.
Conclusion
Bybit’s December Proof of Reserves report paints a picture of measured caution rather than alarm. Bitcoin and Ethereum holdings declined modestly, while stablecoin balances rose significantly. Reserve ratios across major assets remained above 100 percent, underscoring the platform’s claim of full backing.
The shift highlights how users adapt to changing market conditions, reducing exposure to volatility while staying ready to re-enter when opportunities arise. As the crypto market moves into a new year, these allocation patterns offer valuable clues about prevailing sentiment and expectations.
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Ethan is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.
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