Bybit Users Are Holding More Bitcoin and Ethereum While USDT Balances Drop 11 Percent — What the 40th Reserves Report Really Says

Bybit’s 40th proof-of-reserves report tells a quietly bullish story: users on the exchange are holding more Bitcoin and Ethereum than a month ago, while their USDT balances dropped by more than 11 percent. In plain terms — the dry powder is rotating from stablecoins into the major coins.

By Carlos Martinez | October 1, 2026

The Hook: 19.6 Billion USD in Covered Assets

Bybit reported 19.6 billion USD in mainstream assets covered by its latest proof-of-reserves snapshot, taken at 03:00 UTC on September 23 and independently reviewed by security firm Hacken — up from 18.1 billion USD in the previous report. The exchange listed 56,131 BTC in user assets against 58,721 BTC actually held in its wallets, giving Bitcoin a reserve ratio of 104 percent. In simple terms: for every 100 dollars’ worth of Bitcoin customers own, Bybit holds about 104 dollars’ worth.

Ethereum told the same story. User holdings rose 2.96 percent to 551,868 ETH, against 570,018 ETH in wallets, lifting ETH’s reserve ratio to 103 percent from 102 percent. Every one of the 50 tokens covered by the current disclosure had reserves equal to or above user balances, according to the exchange.

On-Chain Evidence: Where the USDT Went

The most striking number is the stablecoin side. USDT user assets fell 11.46 percent from the previous report to roughly 3.59 billion USDT — the clearest decrease among major assets. Bybit still reported around 3.96 billion USDT in wallets, roughly 364 million tokens above customer balances, producing a 110 percent reserve ratio, up from 105 percent in July.

A proof-of-reserves report cannot track why balances moved — it is a photograph, not a video. But the pattern is suggestive. When users sit in stablecoins, they are waiting on the sidelines. When stablecoin balances fall while Bitcoin and Ethereum balances rise, the most common explanation is rotation: converting parked cash into coins. Notably, USDe — the yield-bearing stablecoin — moved the opposite way, with user balances up 62.41 percent to roughly 516 million tokens, and USDC’s reserve ratio hit 223 percent, signals that yield-seeking behavior is alive alongside the rotation.

The Core Conflict: Growth in Holdings vs. Limits of the Data

Zooming out strengthens the trend. In June, Bybit’s BTC user assets stood at 49,309 BTC. Comparing that with the September 23 snapshot shows the exchange now reports more than 6,800 additional BTC in user assets — steady accumulation across a quarter in which the broader market rallied strongly. Bitcoin traded near 84,000 USD at the time of the snapshot’s publication window, with Ethereum around 2,692 USD, both well above mid-year levels.

But honesty requires the caveats. Proof-of-reserves data cannot determine whether individual users bought Bitcoin, transferred it onto the exchange, or shifted holdings for other reasons. It records balances at one point in time. It also says nothing about leverage — users can hold more BTC on an exchange while simultaneously carrying larger derivative positions against it. Rising exchange balances are traditionally read as slightly bearish (coins sitting where they can be sold quickly); rising balances combined with falling stablecoins is more commonly read as positioning for upside.

Market Implications: What This Means for Your Portfolio

For regular investors, the report offers three practical takeaways — plus a way to check your own money is counted.

• Rotation, not exodus — USDT down 11.46 percent while BTC and ETH user balances rose suggests sidelined cash moving into major coins, not users fleeing the exchange
• Solvency snapshot — reserve ratios of 103-104 percent on the majors, reviewed by Hacken, mean reported assets exceed reported liabilities across all 50 covered tokens
• Coverage keeps expanding — the current 50-token set added ten assets including SUI, PUMP and XPL, with new-asset reserve ratios ranging from 101 to 125 percent
• Verify yourself — Bybit uses a Merkle-tree system (a privacy-preserving ledger of all customer balances) so any user can confirm their own balance was included in the snapshot via their account or open-source verification code

The Verdict

One exchange’s monthly report is not a market signal on its own — Bybit is one venue among many, and proof-of-reserves has well-known limits. But the direction is consistent with what traders have watched all quarter: after a strong rally, users are keeping their Bitcoin and Ethereum on exchanges and drawing down their stablecoin war chests. Historically, that mix has preceded both continued rallies and sharp pullbacks, so treat it as a measure of sentiment, not a prediction. The most useful thing you can take from this report is not bullishness or bearishness — it is the habit. If you keep funds on any exchange, find out whether it publishes reserves, how often, and whether you can verify your own balance is in them. Bybit just made that easy for its users; the standard is now yours to demand everywhere.

The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.