A recent rise in bitcoin (BTC “whales” may not be due to large holders of the currency taking their coins off exchanges. This is according to a report by blockchain analytics firm Glassnode.
They stated that “Much of this recent increase in whales can not be explained by new money but by existing wealthy entities withdrawing BTC from exchanges.”
According to the report, the BTC balances on exchanges has been declining throughout 2020 and particularly since March 12th’s Black Thursday. According to the report, the decline in BTC balances on exchanges coincides with off-exchange BTC balances that are held by whales and the overall number.
Glassnode calls this the “whale dominance,” which refers to the percentage of bitcoins in circulation that is controlled by whales rather than exchanges.
We can see that the decrease in BTC balances on exchanges coincides well with the rise in bitcoin whales. Glassnode also noted that this correlates with an increase in whales’ BTC balance. This can be seen when we contrast whale dominance to exchange dominance.
The report stated that withdrawals from exchanges “explain to a large extent how so many whales could appear onto-chain in such an short time” and suggested that this may be a clue to why the shift is occurring.
Glassnode stated that there are many explanations for why these large holders withdrew their BTC from exchanges. However,… whales could have used Black Thursday to gain entry at the bottom and then withdraw their bitcoin to HODL in anticipation of the next bull market.
BTC trades at USD 9,292 at pixel time (16.07 UTC) and is up 1% per day. The price of Bitcoin is stable for a week, but is down by 3% over a month.
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