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Prior to Grayscale's SEC victory, cryptocurrency exchanges saw 30K Bitcoin inflows
Prior to Grayscale's successful outcome with the Securities and Exchange Commission (SEC), cryptocurrency exchanges witnessed an influx of 30,000 Bitcoin units
Bitcoin (BTC) surged on Tuesday after a US court ruled that the Securities and Exchange Commission (SEC) erred in denying crypto asset manager Grayscale's request to convert its bitcoin trust into an exchange-traded fund (ETF), calling the decision "arbitrary and capricious."
According to data recorded by analytics firm Santiment, approximately 30,000 BTC, worth $822 million at the prevailing market cost of $27,400, were moved to addresses linked to centralized exchanges before to the important verdict. The decision resulted in a 6% increase in Bitcoin prices, raising the leading cryptocurrency to $28,000.
Perhaps some merchants anticipated the price increase and planned for it in advance by transferring coins to exchanges. When investors aim to liquidate their holdings or use their coins as margin for derivative trading, they generally move their coins to exchanges. As a result, an increase in exchange inflows is frequently interpreted as a sign of impending price volatility.
"The exchange supply of Bitcoin was significantly increased just prior to Grayscale's victory over the SEC." "It appears that the powers that be were well aware of the inevitable increase in crypto market capitalization as a result of this outcome," Santiment tweeted, echoing onchain analyst Ali Martinez's observation.
Labeling difficulties plague address-based onchain metrics. As a result, making firm inferences from the data is difficult.
Mean inflows and outflows have increased
According to CryptoQuant data, the average inflow or amount of BTC moved to exchanges per transaction increased to 1.146, the highest since June 21, as prices soared to $28,000.
Mean inflow indicates number of coins transferred to exchanges per transaction. (CryptoQuant) (CryptoQuant)
An increase in the mean inflow implies that investors are sending a high amount of coins in a transaction, indicating the possibility of selling pressure.
However, that is not the case this time, as mean outflows reached two-month highs and the net balance kept on exchanges, particularly those allowing spot trading, fell.
"Reserves held on US-based spot exchanges continue to fall, while reserves held on offshore exchanges offering derivatives trading rise." "It's an indication that derivatives and offshore exchanges are driving the current price action," CryptoQuant wrote in a Telegram chat.
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