Nearly 30K Bitcoins Transferred to Crypto Exchanges Ahead of Grayscale Win: Data
After weeks of sluggish price movement, the cryptocurrency market breathed a sigh of relief owing to Grayscale’s significant victory against the US Securities and Exchange Commission (SEC). Bitcoin rallied to $28k before settling near $27.4k, while altcoins followed suit.
Even though the US court ruled in favor of the crypto asset manager on August 29th, traders might have foreseen the potential price surge and taken proactive measures by moving coins to exchanges in anticipation of this development.
Boost in Bitcoin Supply on Exchanges
Popular on-chain analyst Ali Martinez was the first to reveal that nearly 30,000 BTC were sent to crypto exchanges ahead of Grayscale’s triumph over the SEC. This effectively boosted the exchange supply from 1.13 million to 1.16 million BTC.
Signs of #Bitcoin manipulation? Check this out!
Just before #Grayscale legal victory against @SECGov, around 30,000 #BTC were sent to #crypto exchanges — boosting exchange supply from 1.13 million to 1.16 million $BTC. pic.twitter.com/j8xgoAzLrs
— Ali (@ali_charts) August 29, 2023
In response to the analysis, Santiment also highlighted a substantial increase in the supply of Bitcoin on exchanges leading up to the fact. In the latest tweet, the crypto analytic company noted,
“The exchange supply of bitcoin was boosted significantly just prior to Grayscale’s win over the SEC. It looks quite clear that the powers that be knew of the inevitable boost in crypto market capitalization as a result of this outcome.”
Who’s Driving Bitcoin Rally
It is important to note that investors usually transfer coins to centralized crypto exchanges when they plan to sell their holdings or use them as collateral for trading derivatives. The recent rally was no different as well.
Bitcoin experienced an upward trajectory on Tuesday, further extending its gains following the US court’s decision that the SEC was wrong in its rejection of the spot bitcoin exchange-traded fund application by asset manager Grayscale and added that the decision of the financial regulator was “arbitrary and capricious.”
However, the rally was driven by the derivatives exchanges and not spot ones, according to a CryptoQuant analyst.
“There is a tendency for prices to change significantly even with small trading volumes because the overall liquidity in the cryptocurrency market has decreased. However, it seems that there is a need to be a little cautious about the fact that this rally leads to a dramatic rally.”
Further validating the trend is yet another observation by the platform that Bitcoin reserves of US-based exchanges have declined by at least 30% and up to 50% or more while the reserves on offshore trading venues, offering derivatives trading, ramped up. Thereby signaling that derivatives and offshore exchanges are responsible for the current price action.
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