Recently, 30,000 BTCs were sent to unknown cold wallets, prompting investors to speculate about Bitcoin’s future. This movement of a large amount to cold storage can decrease selling pressure and imply that whales and institutional investors anticipate an increase in price and opt for self-custody.
According to rankia.com, a “cold wallet” is one of the ways that exist to protect cryptocurrency investment and that provides greater security when seeking to prevent hackers from accessing and stealing the keys to your wallet by entering remotely and getting hold of the cryptocurrencies. Thus, cryptocurrency wallets allow storing private keys, keeping cryptos in a very secure way and at the same time accessible to the owner.
Considerable BTC Migration to Cold Storage
Data from CoinGlass indicated that approximately 30,000 BTCs were taken out of exchanges the previous week. With Bitcoin presently exchanging at circa $26,000, this means over $780 million has been relocated to cold storage.
Most of these transfers were made from Binance, resulting in a net reserve change of 11,457 BTC. Coinbase, Bitfinex, and Gemini also saw a net outflow of 4,455 BTC, 2,808 BTC, and 6,004 BTC, respectively. In contrast to this, crypto exchange OKX received 2,149 BTC.
This week’s Whale Alerts reported that large amounts of BTC were moved from crypto exchanges to wallets with unidentified owners.
5,140 #BTC (134,268,844 USD) transferred from #Bybit to unknown wallethttps://t.co/LWXJsbooVX — Whale Alert (@whale_alert) August 25, 2023
2,910 #BTC (76,010,381 USD) transferred from unknown wallet to #Coinbasehttps://t.co/5bD9vpvMAE — Whale Alert (@whale_alert) August 24, 2023
4,000 #BTC (106,039,171 USD) transferred from #Bitfinex to unknown wallethttps://t.co/982bCEb4SO — Whale Alert (@whale_alert) August 24, 2023
These unknown wallets are usually cold storage, which means storing cryptocurrency offline. Cold wallets are often used by investors to hoard Bitcoin for long-term asset accumulation.
For many people who own cryptocurrencies for the long term, storing them in cold storage is a safer choice than keeping large amounts on an exchange that may be vulnerable to attacks or fraud.
Why is this Good News for Bitcoin?
Serious investors’ use of Bitcoin cold storage suggests a positive outlook. It eases selling pressure because the amount of BTC up for sale on exchanges decreases. According to economic principles of supply and demand, if supply decreases, prices will increase.
While it is not completely clear what is causing the shift to cold storage. Additionally, it’s worth noting that the SEC’s decision on Bitcoin ETF applications is coming soon, and approval could cause the price of Bitcoin to go up. However, the regulator could delay applications for up to 240 days.
As stated by Tradingview.com, the Bitcoin price is now above $26,000 so the cost has decreased markedly during the past month due to market reactions to different events. However, it has shown a slight increase of 0.42% over the course of a week.
The cryptocurrency is presently trading at $26,000 and has decreased 11.83% in the past month, yet has increased 0.42% over a 7-day stretch. This proposes the shift to cold storage has not had a substantial impact, as Bitcoin’s value is still struggling to rebound.
By Audy Castañeda