Over $1B in Bitcoin (BTC) Moved Overnight From Whale Wallets

A number of enormous wallets that had been dormant since 2014 have woken up to move an earth-shattering amount of Bitcoin.

The past week has been harsh for Bitcoin, and perhaps the last thing it needed was for a group of whale wallets with hundreds of thousands of BTC to suddenly make a move in one fell swoop.

On Tuesday evening, it started when one address (1PnMfRF2enSZnR6JSexxBHuQnxG8Vo5FVK) moved 66,452 BTC directly to another and then proceeded to split it up everything evenly among 100 other addresses, each containing 662.52 BTC, and then an extra address that received exactly 200 coins.

https://twitter.com/whale_alert/status/1070011677297524738

To put things into perspective, this was the ninth-richest Bitcoin address in existence, according to BitInfoCharts.

Only an hour later, Whale Alert sent out another tweet showing that another whale address—this time the tenth-richest—moved 66,379 BTC. Cryptovest tracked the funds and found that they were split in the same manner, among another 101 addresses.

This process repeated itself three more times throughout the night, with a grand total of 263,294 coins transferred, or 1.51% of the entire Bitcoin supply. The US dollar sum of this movement amounts to $1.02 billion using Bitcoin’s price at press time.

Coinbase blockchain “movements” might explain this

Just days before these gigantic whale wallets emptied their coffers, Coinbase posted an update in which it notified users that it would be doing some maintenance.

“Over the next seven days, Coinbase will be running scheduled maintenance across our platform that may cause movements on all Coinbase-supported blockchains. These are controlled, closely monitored movements that are being performed in order to provide enhanced security and protection for our customers,” the exchange wrote.

There are two compelling reasons why Coinbase may have been behind these moves:

  • The announcement was timely and December 4 is definitely within that seven-day window.
  • The nature and timing of the transactions—including the fact that fees are very low in the current bear market—are almost a dead giveaway. The transactions were divvied up from something that could easily be a cold storage wallet in 100 equal parts plus one remainder placeholder (the wallet with 200 BTC).

In addition to these two arguments, there’s also the fact that all of the money ended up going from legacy addresses to SegWit “bc1” addresses. It looks like Coinbase was upgrading the protocol while also redistributing the coins so as to spread out possible points of failure, which is a common financial cybersecurity strategy.

It’s anyone’s guess whether Coinbase was really behind this, but the timing and activity suggest this was typical of what exchanges do when they restructure their funds. A similar thing happened when Bithumb seemingly consolidated all of its funds distributed across multiple wallets into one single cold storage address following a breach of its systems.

This time, if it’s a whale doing some extremely unusual preparation for a sell-off—a far less likely scenario—the psychological effect of hundreds of thousands of BTC going liquid wouldn’t help the current market situation, even if it accounts for only 1.5% of the entire supply.

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