On February 17th, according to CryptoQuant, Coinbase- a prominent player in the cryptocurrency exchange industry- experienced an unbelievable outflow of Bitcoin. From this action, Coinbase has ended up with its smallest confirmed digital currency reserves since 2017. This development involved more than 18,000 BTC that was just short of one billion dollars and since then these amounts have been distributed over some new wallets each having varied values between $45 million and $171 million. Consequently, Coinbase’s public order book had about 394,000 BTC worth over $20.5 billion after this momentous move.
This mass exodus of BTC from Coinbase coincided with a February 16th tweet from Coinbase CEO Brian Armstrong. His eye-popping comments implied that his company has become the biggest player in the crypto space. The fact is that Coinbase controls an enormous 90% of about $37 billion invested in Bitcoin ETFs, making it a cryptocurrency investment vehicle giant through ETF. From the start of the Bitcoin ETF, both retail and institutional products have seen considerable net inflows for Coinbase due to a widening investor base buying digital currencies.
Analyst Observations On Bitcoin Outflow
Julio Moreno, Head of Research at CryptoQuant, commented on the matter via Twitter stating that it was among the biggest per-hour Bitcoin outflow than any from the Coinbase in 2024. In two transactions within one block, numerous Bitcoins moved in large amounts. However, Moreno also noted that there were certain patterns of these transactions which could indicate either keeping Bitcoins or the custody and creation of new addresses having high numbers like 866 BTC or more or internal wallet reorganization. The first possibility suggests that the institutional investors may have entered into the Bitcoin business while it is worth mentioning that most of these transferred coins remained dormant since December 2018.
Analyst James Van Straten weighed in on the matter, suggesting several potential explanations. He also mentioned that while UTXO management seems plausible, it could also be that these funds were meant to increase liquidity for OTC desks or they could have been bought and moved into self-custody. It is interesting enough that this sudden inflow of BTC coincides with Asia’s minor boom.
However, the consequences of such huge movements of Bitcoin from Coinbase like major exchanges reverberate across the market leading to speculation from players as they try to figure out what may have influenced these strategic moves and what their consequences might turn out to be.
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