February 20, 2024 at 12:56 GMTModified date: February 20, 2024 at 12:56 GMT
February 20, 2024 at 12:56 GMT

Whales withdraw $1B in BTC from Coinbase

Coinbase now has $20.5bn in its public order book, which is its lowest level since 2015.

Whales withdraw $1B in BTC from Coinbase

Bitcoin holdings on Coinbase, one of the leading cryptocurrency exchanges, have hit a nine-year low as users strategically move a substantial chunk of their holdings off the platform. 

The latest data from CryptoQuant reveals that over the weekend, whales orchestrated the transfer of 18,000 $BTC, amounting to nearly $1 billion, from Coinbase. 

The values per transfer ranged between $45 million and $171 million, leaving Coinbase’s public order book with approximately 394,000 $BTC, equivalent to an estimated $20.5bn.

Where is the BTC going? 

The migration of Bitcoin holdings away from centralised exchanges, particularly Coinbase, is often viewed as a bullish indicator, signalling reduced availability for sale.

However, the crypto community on social media finds itself divided on the motives behind these transfers. Some speculate that the funds are finding refuge in custodial wallets, anticipating a potential surge in prices. 

The looming Bitcoin halving, just two months away, is seen as a key factor contributing to this supply shock. Conversely, there are voices suggesting that these moved funds might be earmarked for liquidity in over-the-counter (OTC) trades.

Adding another layer of complexity, some argue that these withdrawals may be going to a different custodian, asserting that a substantial portion of assets on exchanges does not truly belong to individual users due to their centralised nature.

Bitcoin halving

The upcoming Bitcoin halving, slated for April at a block height of 740,000, is set to further tighten the supply of new $BTC entering the market. During each halving cycle, the block reward for miners is halved, reducing the new $BTC supply. In this case, the block reward will drop from 6.25 BTC to 3.125 $BTC. 

This scarcity will be combined with robust institutional demand, following the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in the United States in January.

Currently, around 900 $BTC is mined daily, while daily net inflows for Bitcoin ETFs hover around half a billion dollars or roughly 9,650 $BTC. Even with Grayscale registering nearly $100m in daily outflows, institutional interest remains strong. 

Post-halving in April, the daily mined $BTC will see a reduction to about 450 $BTC, creating a significant supply-demand gap. Historical data suggests that such gaps have historically favoured bullish trends in the Bitcoin price, often leading to new all-time highs within a year of the halving event.

Bitcoin recent price movement

After a bearish slump following the sell-the-news reaction to the ETF approval, Bitcoin has made strong gains over the past few weeks. 

Bitcoin is trading at around $52,000, its highest level since December 2021. The largest cryptocurrency is up 4% in the past seven days and 25% in the past month. However, it is still down 25% from it’s all-time high of around $69,000.