Crackling with intrigue and speculation, a revealing piece of on-chain data has made waves within the bustling crypto community. Tether, the world’s largest stablecoin issuer, has been caught red-handed bolstering its Bitcoin holdings. This exhaustive act appears to have created unexpected ripples predicating a dip in Bitcoin’s trading value, challenging the conventional market logic of bullish advancement under novel acquisitions.
In an operation of substantial scale on March 31, Tether procured a grand total of 8,888 Bitcoin, analysis by esteemed blockchain platform Arkham Intelligence verifies. This move swelled Tether’s Bitcoin reserves to just shy of a gargantuan 75,400 BTC, confirming Tether’s position as one of the most significant Bitcoin holders globally. Its current holdings even dwarf those of some of the most highly-esteemed crypto exchanges and the issuers of the much-controversial spot Bitcoin ETF.
In the previous year, Tether expressed intentions of implementing a recurrent investment strategy to accumulate Bitcoin, fuelled by a pool of profits harnessed through its major operations. The realization of its grand plan in light of its recent success sends little shockwaves through the crypto industry.
Nonetheless, the aftershocks of Tether’s investment are creating seismic ripples in Bitcoin’s landscape. Expectations were high that this hefty acquisition would bolster Bitcoin’s price. Instead, we’ve seen Bitcoin plummet below the $70,000 mark, prompting questions and leaving crypto enthusiasts scratching their heads. Pervasive speculation suggests that unseen factors might be eclipsing Tether’s investment and driving Bitcoin’s unexpected and harsh downturn.
In hopes of shedding light on the mystery, esteemed crypto trading firm QCP Capital has shared some enlightening insight. According to their explanation, Bitcoin’s startling dip below $70,000, reaching a low of $66,000, owes to mass liquidations on popular, retail-heavy exchanges like Binance where perp funding rates have collapsed from previously sky-high 77% to virtually nothing.
Fingerprints of spot Bitcoin ETFs, especially Grayscale’s GBTC, are also starkly visible at the scene of Bitcoin’s decline. Grayscale itself has been grappling with considerable outflows from its fund, amounting to up to $302.6 million just this April 1. This hefty depletion contributes significantly to the aggregated net outflows of $85.7 million recorded by similar Bitcoin ETFs. This, in turn, fan the flames of an overpowering selling pressure on Bitcoin, effectively tackling the existing buying pressure in the ecosystem.
Simultaneous activity in the derivatives market also reinforces the bearish battlefield. Data from Coinglass spell out that a daunting $409 million has been stripped from the market within the last 24 hours, with a striking $328 million in long positions obliterated in the same timeframe.
As the dust settles on the virtual battlefield, Bitcoin emerges, nursing its wounds at an approximate trading value of $66,500, reflecting a significant 4% fall within the last 24 hours, as evident from data supplied by CoinMarketCap.