🚀🌙 In the past month Institutional investors bought $1 billion dollars worth of BTC secretly through OTC desks 🚀🌙

in #cryptocurrency6 years ago (edited)

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This is perhaps the most bullish news I've come across all year: Five brand new Bitcoin wallets have accumulated almost $1 billion dollars worth of Bitcoin in the last month. There is very strong indication that these wallets belong to institutional investors who have done their purchasing through OTC trading desks. This kind of money does not enter the space on a whim.

Wall Street might not be coming, they might already be here

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Everything is transparant and publicly visible on the blockchain (most of them, anyway) through block explorers and many people keep an eye open for any kind of inconsistencies or other notable things. Torsten Hartmann, of Captainaltcoin.com, discovered something very interesting: Five brand new Bitcoin wallets that have accumulated more than 133.000 BTC in the past month, which equals a value of about $861 million USD. While the owner(s) of these wallets cannot be deduced due to the pseudonymity of the blockchain, the fact that these wallets contain transactions ranging from 10.000 BTC ($64 million USD) to 38.888 BTC ($248 million USD) indicates that at the very least these are very wealthy entities because very few investors have the means to make such large purchases at once. What's most interesting is that despite there being apparant accumulation of almost 1 billion worth of Bitcoin, the price did not budge one bit. That gives us a strong indication that the BTC was purchased through OTC deals.

The five Bitcoin wallets are:

  • 34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo - 57.000 Bitcoin, roughly $366 million USD

  • 37AnGU6zY9esycd4qgTpAfB7BvU8z21TDf or 3Kro2DNfYdkMTrzKkUS39DFa3aB3sAp3KQ - 30.000 Bitcoin, roughly $192 million USD, of which 22.000 Bitcoin was since moved from the first address to the second

  • 3KeXRfyU9LZTV3qeN3AZFbKrpv3TSNkzo1 - 22.000 Bitcoin, roughly $140 million USD

  • 3Bo9FTs5Fx8tXoUKJZeDDFXbvpfNK18qQ1 - 15.000 Bitcoin, roughly 92 million USD

  • 3Ai5ocGhKdKT3tgCjarqH8auuVfpZwLgeC - 11.000 Bitcoin, roughly 71 million USD

It's worth noting that while some of the BTC can be traced to exchanges such as Bitfinex and Binance, this does not mean they were purchased on the regular open market. Large exchanges function regularly as a middleman for matching large buyers and sellers on the OTC market. Bitfinex has been doing this since 2016 at least.

Why OTC?

Large investors face a problem with cryptocurrency. They may want to buy in, but with the amounts of money they want to spend they risk affecting the price during their purchasing process. Just dumping $100 million into Bitcoin will make it significantly spike up, and you'll end up paying more than you want. Similarly, dumping $100 million worth of Bitcoin will crash the price, therefore netting you less than you wanted. This is why OTC trading exists, where large buyers and sellers are matched together so they can trade outside of the open market, therefore not affecting the price.

Past research by JP Morgan during the 2017 bull-run had deduced that since it's inception in 2009 a mere $6 billion USD had been invested into Bitcoin in order to make it's total market cap worth more than $300 billion USD. If that is true, then you might imagine the significance of an almost $1 billion dollar buy-in in today's markets, and why these were likely OTC trade deals.

BTC remains stable - which is odd

An increasing number of analists and commentators are of the opinion that the Bitcoin price is being artificially surpressed and kept within a certain trading range in order for large players to accumulate. Despite an enormous amount of bullish news the price of Bitcoin has remained stagnant for months now, which is out of the ordinary for an asset that is known for it's volatility and responsiveness to news. The above Bitcoin wallets and transactions seem to strengthen these suspicions - by surpressing the Bitcoin price on the open market, large OTC orders benefit greatly because they are able to buy at current price levels.

To the moon?

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The idea is that large institutions are buying in right now to stay ahead for what's to come next. Fidelity and Bakkt are launching very important platforms to service the financial giants of Wall Street with crypto, and it could very well mean that wealthy entitites are buying in ahead of these developments.

The effects on the Bitcoin and crypto markets remain to be seen. The accumulation of the institutions could go both ways: They could buy in now, in order to open up the flood gates with Bakkt & Fidelity and others and start the biggest FOMO the world has ever seen, OR they could be accumulating in order to be able to massively crush the Bitcoin price through it's support levels (in order to buy even cheaper). While investing $1 billion and crashing the price so it becomes worth half of that seems like a silly idea, it makes a lot more sense when you consider that $1 billion might be peanuts for entitites controlling hundreds if not thousands of billions. The cost may be worth it, if they can save 50% of their total purchase. You never know, and as I keep saying, these institutions are not entering the space to me us rich.

The future prospects are very bright though. Even if they intend to crash the price, which is extremely risky to begin with, in the long run it still means that they are buying into the ecosystem and are here to stay with crypto. If they want Bitcoin at half price, that's a great indicator that they want Bitcoin. And even with the risk of short-term loss due to potential manipulation, the long term prospects are extremely good.

If you've been reading my blog for a while then you know I tend to be skeptical and one of the more cynical bulls out there. I've been calling for Bitcoin to drop below $5000 for many months now and continue to see it as a very likely scenario. However, this news has given me a serious case of the FOMO and while I initially intended to start dollar-cost averaging in at a lower price, I have now decided I will stray from that plan and instead start buying some BTC starting tomorrow. Even if I consider another drop likely, I feel I just cannot risk missing the train if I am wrong. Instead, I will suck up any potential short/mid term drops and rest assured that 'Time in the market matters more than timing the market'. I'm going to follow the whales.

You've read that right. Me, the cynical bull and short/mid term bear, is going out to buy new BTC. Serious case of FOMO. How's that for an indicator?
I might be wrong, so don't follow me on this, and always do your own research and make up your own mind.



The following video by Altcoin Daily talks about these wallets:

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I saw this exact youtube video earlier this morning and started thinking the same thing. I was also wondering why it hasn't been as volatil as normal lately but this really makes a lot of sense. After this long as winter I would love to see cryptos go green for a change of pace, if I had any extra money id buy more now too ;)

Yes if you keep a close enough eye on what's going on it almost feels like more and more pieces of the puzzle are fitting together. Crypto is just so fascinating like that..!
But that video gave me a serious case of the fomo!

This is the best article I read lately my dear.
Indeed what you explain here is very important and it makes sense that they use that OTC trading in order to do not impact the price.
If these indications are fine we may see very soon the biggest bubble ever.
Thanks for sharing!

Thanks!!
And I sure hope we will see the biggest bubble ever...! I'm ready! :)

Did you go for "shopping" already?

Yes and it was a disaster!! Regulations got really tight apparently. There's limits everywhere on how much I can buy, and lengthy KYC and account verification stuff, that all wasn't there last year when I last bought.
Now I didn't manage to buy more than €100 and have to wait for tier 2 verification blahblah...! All in all I spent a damn long time on it too.

No wonder BTC isn't going up when they make it this hard to buy!

Hahaha! The typical kraken stuff...
Ok, take it easy. Once you get the tier2 everything will flow.
Cheers

Posted using Partiko iOS

No, I don't use Kraken. I usually (=not very often at all) buy from a local 'buy btc here' website. The costs are neglible anyway and depositing by bank to an exchange takes too long for my tastes

well, i think the whales are storing more btc as the price keeps in a low range of fluctuation. Good opportunity for institutional investors and retail investors. No need to spend too much time on some unknown altcoins, just stay focus on BTC and ETH. Very soon the market will tell whose decision is correct.

Yes, but these are not the same whales as we're used to! There are not a lot of bitcoin whales who are able to buy with these kind of millions. 133K BTC is almost as much as the winklevoss brothers ' total holdings (reportedly 150K btc). So I doubt it's existing bitcoin whales, unless these bitcoin whales somehow managed to make a lot of extra money that they didn't spend before.

Great stuff, I am very curious when the first institutional investor comes out and actually confirms to have bought a significant amount of BTC. As long as they are trying to accumulate, they probably won't.

I notice that nowadays most of the volume on exchanges are caused by bots and big deals are done OTC, in underground channels with a trusted admin functioning as escrow. What do you see and think of this?

Hey, you're still here! Thought maybe you had left, good to see you around still!

I think you're right on the majority of big deals happening OTC. But it's only a matter of time before the OTC market dries up and the effects trickle down to the exchanges. At some point there will be OTC buy orders, but in order to fill it people will buy on exchanges I believe.

Also, on a sidenote.. remember that job thingy we talked about before? After some time and negotiations, we finally came to an agreement and I started writing for them two weeks ago! :)
But shhh, don't want to really publicize it on here, anonimity and immutability of the blockchain and all.. ;)

Great post. I completely agree this is not a bad time to slowly DCA into a position...if planning to hold for the long haul.

I sure do plan on holding for the long haul! I'm okay with huge drops.. been there before many times! When it comes to crypto, I aim for the moon... or not at all!

I like your attitude @pandorasbox. Regardless of the short term, I believe we'll be at ATH's no later than this time next year.

Amen to that!

Awesome news. I think 2019 will be a very interesting year for cryptos.

Posted using Partiko Android

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Interesting. Most definitely expected, and I'm willing to bet that the odd clever banker or two got in a year or two back already. It's going to make the market increasingly interesting as these whales start competing against another. I wonder if this may make those giant buy and sell walls of manipulation better or worse.

I don't consider the flat BTC price to be surprising, market sentiment has been very poor until now. Any price rise was soon sold by those desperately seeking to make some sort of return during the first half of 2018. Similarly, the last two months or so have remained flat, but I think that the signs of an emerging bull market become clearer by the day. To a contrarian, the signs have been around for over half a year already, but it always takes the mass market a long time to catch up, especially after a scare like they got in February. I expect more institutional wallets to be created soon and I expect that the price of BTC (and the alts) will indeed start to climb as those wallets get filled.

Hey, have u heard anything about trezor harware wallet supporting the bch fork? Sorry to bother u I just know u stay up to date wirh a lot of crypto info and I didn't know who else to ask and i can't find anything about it online.. 🤔