Bitcoin saw its price suffer from tremendous selling pressure which filled the market in recent weeks. However, as investors wait for relief, it appears the sellers are far from done, with one notable Bitcoin sale transaction in particular sending the market into a frenzy.
Whale drops $1 billion in Bitcoin
The whale tracker Whale Alert took to inform the crypto community of a large Bitcoin transaction was participating in the settlement. The transaction was moving a total of 16,276 Bitcoin which was worth around US$1 billion at the time the transaction was made.
While large transactions are not out of the ordinary, their fate is often the determinant of whether it is a bearish or bullish transaction. In cases where coins are leaving centralized exchanges and going into personal wallets, this can be bullish because this usually means that investors are consolidating their coins into private personal storage and do not plan to sell them.
However, in cases where coins are being transferred to centralized exchanges, this can be very pessimistic as it often means investors are looking to sell their coins. This was the case for the $1 billion Bitcoin transactions, as the 16,276 Bitcoin were transferred to the Binance exchange.
Naturally, the transaction caused a stir among investors who contemplated the impact such a massive sell-off could have on the cryptocurrency’s price. However, the origin of the transaction would be revealed soon after, and as a result, prices would stabilize.
Binance claims 16,276 BTC transaction was a SAFU fund conversion
In the early hours of Thursday, Binance, the world’s largest cryptocurrency exchange, assumed responsibility for the 16,276 Bitcoin transaction that was sent to the exchange. The funds would have come from its emergency insurance fund known as the Secure Asset Fund for Users (SAFU).
According to announcement, the exchange is converting this insurance fund into stable coins to avoid fluctuations in the price associated with Bitcoin. Binance explains that it maintains the balance of this fund at US$1 billion, which represents a large and sufficient level to safeguard users’ funds on the exchange.
As for why the exchange chose USDC as its preferred stablecoin, it said: “Making use of a trusted, audited and transparent stablecoin for SAFU further increases its reliability and ensures that it remains stable at $1 billion.” .
Bitcoin has since been converted to USDC and SAFU. portfolio maintains a balance of 1 billion USDC.
BTC price stages another recovery | Source: BTCUSD on Tradingview.com
Featured image from Bitcoin News, chart from Tradingview.com
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