Despite Bitcoin’s (BTC) multi-month bearish price action, institutional investors remain resolute. That is, if the recent outflow of BTC from Coinbase is anything to go by. Exchange withdrawals and deposits are a fantastic method of determining the general sentiment towards a digital asset, hence why there are services designed with the intention of tracking exchange inflow and outflow.
One of these is WhaleAlerts, a blockchain tracker that has recently reported a transfer of 29,611 BTC ($1,166.128,557.60) off of Coinbase to an unknown address. Could institutions be buying the dip, or is there something else behind this billion-dollar asset movement?
Largest single BTC move in 2022 yet
According to WhaleAlert, several substantial transactions worth around 9,900 BTC were made in quick succession of one another.
As shown in the above photo, all of them were transferred from Coinbase (specifically Coinbase Pro) to a single unknown wallet – presumably cold storage. This was the largest single movement of Bitcoins from any exchange for this year so far, with the total value being over $1.17 billion.
This is just the latest incident in crypto moving off exchanges in the past few weeks. In fact, over the past few weeks, the crypto market has seen one of the strongest upsurges in regards to this. Just last week, a single entity transferred 40,028 ETH off Curve-fi to an unknown wallet ($111 million in value), with other similar transfers bringing the total number of Ethereum moving off exchanges to over 100,000. XRB, BNB and USDT follow closely behind as assets with the most transfers.
This increased outflow has had a predictable impact on Bitcoin holdings on Coinbase, pushing it down to a four-year low of 649,500 BTC. Accounting for all centralised exchanges, that figure is around 2,519,403 BTC, the lowest its been since November 2018.
Bullish or Bait: What’s behind the $1B transfer?
Popular crypto analyst Lark Davis, has been following these transactions closely, much like other investors. He suggested that these transactions could be internal transfers i.e. Coinbase shifting their coins to a cold wallet. At the same time, Davis also noted the possibility of a new entrant into the market, which would mean some significant optimism for Bitcoin – institutional optimism specifically.
Glassnode (blockchain analysis firm) also backs the possibility of institutional adoption, stating the following in a recent newsletter: “Large outflows like this one are actually part of a consistent trend in the Coinbase balance, which has been stair-stepping downwards over the last two years,” Glassnode said in a weekly newsletter published Monday. “As the largest exchange by BTC balance, and a preferred venue for U.S. based institutions, this further supports the adoption of bitcoin as a macro asset by larger institutions.”
Institutional investors may also be interested in Bitcoin as an alternative store of value, given how inflation is spiralling out of control in the U.S. It would definitely be a viable strategy to make their assets uncorrelated to major market-moving events in traditional finance.
On the other hand, there may be a simpler explanation. Traditionally, digital assets moving from exchanges to wallets is regarded as bullish and reduces the likelihood of entities selling their coins, which would be a detriment to the market. With this in mind, crypto whales have both the resources and motive to manipulate the price of say, Bitcoin, with such transactions in order to artificially create a sense of bullishness.