Despite the ‘Crypto Winter’, investors and HODLers are not looking to withdraw their investments or BTC holdings. In fact, they might actually be trying to retain BTC in safer places amid unstable market conditions.
Just yesterday, an “ancient whale” (inactive BTC holder) transferred $100 million worth of Bitcoin to the Kraken cryptocurrency exchange.
Amidst the uncertain market scenario, participants are keeping a close check on any upheaval or indications which could potentially impact the price of important assets, especially Bitcoin (BTC). This definitely includes the Whale activity.
In a recent development, on-chain data indicates that a Bitcoin whale transferred 6,003.59 BTC ($117.6 million) from crypto exchange Binance in a single transaction. The data was shared by CryptoQuant community manager JA_Maartun on September 4.
What Prompted The Move?
The Bitcoin address that made the transaction couldn’t be identified due to the anonymous nature of cryptocurrencies. However, we may conclude that the whale moved BTC to a more secure cold wallet amid the depleting markets. This indicates that the investor has no intention of selling their holdings in the near future.
This isn’t the only instance. Many large holders prefer to have direct custody of their tokens when they intend to hold them for a longer term, and the outflows are widely viewed to represent a bullish sentiment.
In addition to security reasons, some whales usually spread out their holdings in different crypto exchanges to ensure liquidity. Sometimes, looking at whales’ selling and buying patterns is considered a good indicator of the asset’s price movement.
Hence, such important whale transactions have been known to cause significant price volatility for Bitcoin.
A $100 Million Transfer
According to data provided by blockchain explorer OKLink, an ancient Bitcoin whale address created back in 2013, sent 5,000 BTC (worth approximately $100 million) to the Kraken exchange yesterday.
It is noteworthy that the previous transaction executed by the address was made back in May 2021.
According to crypto research firm CryptoQuant’s analysis, this movement might be a sign of growing selling pressure, with long-term holders moving to ensure liquidity. Nevertheless, large players will most probably sell their holdings through over-the-counter desks, hence, they are unlikely to push the price of Bitcoin much lower even if they wish to sell a lot of coins at the same time. It is also quite possible that whales might simply be moving coins to different wallets for security reasons.
Bitcoin Whales Condemned
Given their ability to influence prices, Whales have come under criticism for making Bitcoin centralized, and hence, straying further away from the objective of promoting decentralized finance. Additionally, the wealth inequality in Bitcoin has also been receiving criticism from crypto critics.
Interestingly, amidst the ongoing crypto market meltdown, most investors can be seen to ‘HODL’ the asset, in an expectation of a possible rally. A September 1st highlights the same, stating that 62% of Bitcoin holders had not sold the asset for over a year.
As of now, Bitcoin continues to float below $20,000 after breaching the level in the wake of a positive United States jobs report. At the time of writing, the flagship cryptocurrency was trading at $19,776, after a 0.44% dip in the last 24 hours.