Recently, China’s crackdown prompted massive on-chain transactions as cold wallets moved over $3 billion in Bitcoin and 800k ETH.
After China cracked down on cryptocurrency trading, exchanges began to restrict services to local users in the country. FUD quickly spread and many traders wondered what penalties they would face for violating the latest ban.
Against this backdrop, this past weekend has seen Bitcoin and ETH whales frantically move coins from the addresses of Huobi exchange, established in China
A whale-led escape
When Bitcoin whales transferred roughly 22,000 BTC (about $ 952,215,000 at the time of writing) from Huobi to other sites and unfamiliar purses, the Twitter account Whale Alert raised the alarm. On September 26th, at 10:43 a.m. (Synthetic Team time), the money transfer began.
ETH whales are equally busy. At around 13:49 on September 26 (UTC), whales moved approximately 800,000 ETH in waves of 100,000 ETH (equivalent to $2,403,039,390 at press time) from Huobi to other locations. and an unknown wallet.
Although there are a lot of high value transactions, they are mainly from a few wallets that move multiple times.
Distributing $ 3.1 billion in Bitcoin, a wallet labeled Huobi’s Cold Store
On September 26, at least 72,999 BTC ($ 3.1 billion) was moved on the Bitcoin network, according to on-chain activities. Two big wallets are responsible for these actions, one of which might be Huobi’s Cold Storage Wallet. While on-chain experts have reported a total of 72,999 BTC, a third analyst claims that the “1Njh” wallet has received a total of 104,999 BTC at least at the time of writing.
According to data from oxt.me, at least one of the two BTC addresses was marked twice as a Huobi Cold Storage Wallet. Additionally, this move was spotted by btcparser.com’s analytics software and the Telegram Gold Found In Sand research team. A member of Gold Found In Sand’s on-chain research team said:
“Today our second analyzer detected 72,999 bitcoins in motion. No panic. This is the exchange where Huobi transfers their money. But what happens next is not entirely clear. Funds from the “1Njh” wallet were withdrawn in transactions of 2,000 BTC and each transaction had a recipient of approximately 1,800 BTC, the rest was spread across various small wallets.
Perhaps this is a new fund distribution mechanism. What if there was a government response to the next rejection? In any case, our analyzer continues to monitor the situation. And all these movements are clearly visible from the comprehensive view of the third analyzer. ”
Inquisitive money transfer method
According to the analyst, the recent changes are likely to be linked to the Chinese government’s declaration to some extent.
“Right. We know the Chinese government has made many similar announcements. But such a move only happened today. Funny.”
At the same time, the researcher emphasized that the special thing is not only the way in which the money is moved, but also how the coins are transferred.
“What we find strange is that the amount is withdrawn in 2,000 BTC transactions, but even in those 2,000 there is an address that gets almost +1,800 coins and dozens of smaller addresses that get the rest. We are looking forward to these smaller addresses. Is it the withdrawals made by existing Chinese customers? We are only speculating, we have not yet determined exactly, “concluded the researcher.
Whales swim to the new harbor
However, whales are not necessarily HODL at the moment. Glassnode data shows that ETH inflows have just hit a one-month high of 12,342,276 ETH, based on a 7-day moving average.
Volume of ETH inflows into the exchange | Source: Glassnode
However, if you look at the daily on-chain exchange on September 26th, the Glassnode data shows $ 629.6 million in BTC and $ 590.5 million in ETH left the exchange. Both have negative net flows of more than $ 100 million each.
News from stock exchanges
In August of this year, Huobi recorded a transfer of up to $ 740 million in bitcoin. However, whales have recently moved even more BTC and ETH through this exchange.
As reported by Bitcoin Magazine, investment strategist Raoul Pal suggested that China’s recent ban could be a way to get rid of cryptocurrencies before the country introduces its digital yuan (CBDC). China’s CBDC is entering the pilot phase in which four cities are participating. The government aims to introduce CBDCs in time for the Beijing Winter Olympics in February 2022.
Huobi Global said yesterday it has “stopped account registration for new users in China” and will “phase out existing user accounts in China by 2022”. Binance has also prevented users from registering a Chinese phone number. Binance, Huobi and OKEx were previously blocked by Chinese search engines.
At the time of writing, the Bitcoin Fear and Greed Index recorded a value of 27. Meanwhile, the index for ETH was slightly higher at 34. Both signals fear.