Bitcoin has seen its price suffer from the massive selling pressure that has filled the market in recent weeks. However, as investors hope for relief, it appears the sellers are far from done, with one notable Bitcoin sell transaction in particular sending the market into a frenzy.
Whale dumps $1 billion worth of Bitcoin
Whale tracker Whale Alert contacted X (formerly Twitter). to inform the crypto community of a large Bitcoin transaction that participated in the sell-off. The transaction involved a total of 16,276 BTC, which was worth approximately $1 billion at the time the transaction was executed.
While large trades are not uncommon, their destination often determines whether it is a bearish or bullish trade. In cases where the coins move away from centralized exchanges and into personal wallets, it can be bullish as this often means that the investors are consolidating their coins into personal private storage and have no intention of selling them.
However, in cases where coins are transferred to centralized exchanges, it can be very bearish as this often means investors want to sell their coins. This was the case with the $1 billion Bitcoin transaction, where the 16,276 BTC were transferred to the Binance exchange.
Naturally, the transaction caused a stir among investors who pondered the impact such a major sell-off could have on the cryptocurrency’s price. However, the origins of the transaction would be revealed shortly afterwards, and prices would stabilize as a result.
Binance says 16,276 BTC transactions were SAFU fund conversions
In the early hours of Thursday, Binance, the world’s largest crypto exchange, took responsibility for the transaction of 16,276 BTC sent to the exchange. The money reportedly came from the emergency insurance fund known as the Secure Asset Fund for Users (SAFU) fund.
According to the announcement, the exchange converts this insurance fund into stablecoins to avoid price fluctuations associated with Bitcoin. Binance explains that it is keeping the balance of this fund at $1 billion, which represents an ample level sufficient to safeguard users’ money on the exchange.
On why the exchange chose USDC as its stablecoin of choice, it said: “Using a trusted, audited and transparent stablecoin for SAFU further increases its reliability and ensures it remains stable at $1 billion.”
Bitcoin has since been converted into USDC and SAFU wallet maintains a balance of USDC 1 billion.
BTC price stages another recovery | Source: BTCUSD on Tradingview.com
Featured image from Bitcoin News, chart from Tradingview.com
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