A whopping 30,000 BTC was transferred to unknown wallets in the past week, leaving many investors wondering about the current outlook regarding Bitcoin. When the big money is kept in the fridge, it reduces selling pressure, as it often indicates that whales and institutional investors expect the price to rise and choose self-restraint.
Mass exodus of BTC to cold storage
Data from CoinGlass almost shows that In the past week, 30,000 BTC were taken off the exchanges. With Bitcoin currently trading at around $26,000, this equates to over $780 million moved to cold storage.
Most of this movement comes from Binance, with a net change of 11,457 BTC in its reserves. Coinbase, Bitfinex, and Gemini also witnessed a net exodus of 4,455 BTC, 2,808 BTC, and 6,004 BTC, respectively. In contrast, crypto exchange OKX allowed 2,149 BTC to move to its exchange.
Whale movement alerts from Whale Alerts this week have also shown several examples of BTC movements from crypto exchanges to unknown wallets:
🚨 🚨 🚨 🚨 🚨 🚨 5,140 #BTC (USD 134,268,844) transferred from #Bybit to unknown wallethttps://t.co/LWXJsbooVX
— Whale Alert (@whale_alert) August 25, 2023
🚨 🚨 🚨 🚨 2,910 #BTC (76,010,381 USD) transferred from unknown wallet to #Coinbasehttps://t.co/5bD9vpvMAE
— Whale Alert (@whale_alert) August 24, 2023
🚨 🚨 🚨 🚨 🚨 4,000 #BTC (USD 106,039,171) transferred from #bitfinex to unknown wallethttps://t.co/982bCEb4SO
— Whale Alert (@whale_alert) August 24, 2023
Unknown wallets typically mean moving to cold storage, which refers to any method of storing crypto offline. Investors use cold wallets to hold Bitcoin for the long term as a way to accumulate their assets.
For many long-term holders, this is a safer option than holding large amounts of cryptocurrency on an exchange that is at greater risk of hacks or scams.
BTC price sitting above $26,000 | Source: BTCUSD on Tradingview.com
How is this bullish for the price of Bitcoin?
Bitcoin in cold storage points to bullish outlook from serious investors. It reduces selling pressure as the amount of BTC available for sale on exchanges has shrunk. According to the economic principles of supply and demand, the lower supply is likely to lead to higher prices.
While it is not entirely clear what causes this transition, the timing of this move to cold storage is also noteworthy. The SEC’s decision on spot Bitcoin ETF applications is imminent, with many believing approval would lead to a spike in Bitcoin’s price. However, the regulator can postpone the applications for a maximum of 240 days.
The price of Bitcoin, like the market, has experienced a significant dip over the past month responded to various news items. At the time of writing, the cryptocurrency trades for $26,000 and is down 11.83% over the past month but up 0.42% in a seven-day span. This could indicate that the move to cold storage has not had a significant effect as Bitcoin’s price is still struggling to recover.
Featured image from iStock, chart from Tradingview.com