Institutions Transferring Bitcoin (BTC) to Cold Wallets: Will Prices Rise?

Institutions Transferring Bitcoin (BTC) to Cold Wallets: Will Prices Rise?

48,000 bitcoin (BTC) were transferred out of American cryptocurrency exchange Coinbase this week, researchers from the South Korean analytics platform CryptoQuant say.

According to them, the majority of the withdrawn BTC had been stored in Coinbase Pro for three to five years.

This was the largest withdrawal from a cryptocurrency exchange since the market crash in June of this year and the second-largest withdrawal in history. Withdrawals from cryptocurrency exchanges could mean that investors have changed their minds about selling and now want to hold on to their coins.

Whales Accumulating Bitcoin amid Coiled Market

The total value of the BTC transferred was around $940 million, and it was carried out in three separate batches totaling 11,280 BTC, 4,560 BTC, and 32,000 BTC. According to the post, about 32,000 of the 48K BTC were thought to be between three and five years old. On Tuesday, CryptoQuant said that more research is needed to determine if the transaction is a flow within the exchange, a transfer to a new wallet, or a simple outflow.

Afterward, Cryptoquant, in a follow-up post said that 8,000 BTC had been deposited on Coinbase shortly after. Maarten Regterschot, an analyst at CryptoQuant, says that some of the transactions were split into 122 BTC. He added that this common pattern happened more than once during the 2021 bull run.

The onchain movement of old coins coincides with a period of expected market volatility, as reported by Dailycoin on Tuesday. In particular, “A Coiled Spring,” a recent report from Glassnode Insights, says that Bitcoin’s price will fluctuate in the near future.

Even though the correlation between Bitcoin and stocks is lower than it was last month, it is still at a record high. Still, macro-trigger points like major economic data reports and central bank policy greatly affect Bitcoin’s value. Cryptocurrency market participants have been thinking much about its strange lack of volatility lately.

According to the Santiment data aggregator, whales have been acquiring Bitcoin in the last few days. Their most recent tweets say that wallets with between 0.1 and 10 BTC have increased their supply of Bitcoin to an all-time high of 15.9% of the total supply.

Since February of last year, the number of large wallets (holding between 10,000 and 100,000 BTC) has skyrocketed. However, the percentage of Bitcoin wallets holding between 100 and 10,000 coins is at a three-year low, at 45.6%.

On the Flipside

  • Since reaching an all-time high in 2021, the value of Bitcoin has fallen by over 70%, and the market has been in a downtrend for almost a year.
  • The decrease in the number of medium-sized wallets, and the associated increase in the number of large wallets, shows that investors are now hoarding their Bitcoins instead of using them.

Why You Should Care

According to data from on-chain analytics company Glassnode, major exchanges’ BTC balances have been dropping more per day in comparison to the prior month than at any point since mid-July. On October 18 and October 19, the 19 trading platforms that Glassnode monitors had lost about 100,000 BTC over the previous 30 days. Whales’ stockpiling is typically an indication that the Bitcoin price is bullish.

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