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Tuesday, October 19, 2021

A whale bought $1.6 billion worth of bitcoin

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A buyer or a group of buyers entered an order on a centralized exchange to buy $1.6 billion worth of bitcoin. That’s not nothing – to put it in perspective, that’s roughly 4.5% of the average daily volume in the bitcoin spot market over the past two months.

That much supply hitting the market in under five minutes (13:11 to 13:16 UTC Wednesday) is a lot to jam into any one exchange (or three). It almost immediately sent bitcoin prices skyrocketing 5% to roughly $55,500.

Bitcoin Chart

With a big buy, filling every offer eventually pushes the transaction price (and thus the average execution price) higher and higher. It seems like Wednesday’s big buyer was in a big hurry to get the trade done.

 

Binance, Huobi and ByBit exchanges saw particularly large volumes in their perpetual futures contracts, according to Ki Young Ju, CEO of data provider CryptoQuant.  While these are not technically based in China, have long had ties to the country,where yet another crackdown on crypto was recently announced

Ki hypothesized that one possible explanation could be traders taking on huge positions ahead of a rumored approval by the US Securities and Exchange Commission of a futures-based bitcoin exchange-traded fund (ETF). The buzz hit the market after the regulator’s chairman, Gary Gensler, merely reiterated his previously stated preference for a futures-based ETF should one ever get launched.

“If this move was the ETF front-running from US whales, they are likely to use non-US exchanges to avoid blame for insider trading IMO,” Ki tweeted, shooting down the idea that the trade came from an order on Coinbase. “Spot trading volume dominance for Coinbase is increasing lately, but not that high compared to early this year.”

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