After China’s crackdown on crypto transactions, exchanges began to limit their services for users based in China. FUD rapidly spread and many traders began to wonder what penalties they might face for violating the latest ban.
Around the same time, the normally quiet weekend saw a frenzy of Bitcoin and Ethereum whales moving their coins from the addresses of the crypto exchange, Huobi, which was founded in China.
A whale-planned getaway
The Whale Alert Twitter account sounded the alarm as Bitcoin whales moved around 22,000 BTC or about $952,215,000 (at press time) from the Huobi exchange, to other locations and unknown wallets. Transfers started around September 26 at 03:43 UTC.
Ethereum whales were not idle either. At around 06:49 UTC on 26 September, whales moved around 800,000 ETH in instalments of 100,000 ETH or $2,403,039,390 (at press time) from Huobi to other locations and unknown wallets.
While there were a number of high value moves, they mostly came from a few wallets with repeated transfers.
Swimming to new harbors
However, the whales aren’t necessarily hodling [or hiding] their coins. Glassnode data show this Ether trade entry volume just hit a one-month high of 12,342,276 ETH, based on the seven-day moving average.
However, when looking at the daily on-chain exchange flow for 26 September, Glassnode data showed that $629.6 million left exchanges in BTC while $590.5 million left exchanges in ETH. The two coins recorded a negative net flow of over $ 100 million each.
News from exchanges
In August this year, Huobi saw an inbound transfer of $740 million in Bitcoin. However, the more recent whales have moved much more into Bitcoin and Ether through the exchange and out of it.
Looking at China’s latest ban, investment strategist Raoul Pal suggested that the move could have been a way to clear the crypto scene before the country’s launch of the digital yuan. The Chinese CBDC has entered the pilot phase, with four cities participating in the trial. The government is aiming to launch the digital yuan in time for the Beijing Winter Olympics in February 2022.
In an announcement, Huobi Global said it had “ceased registering accounts for new users in Mainland China” and “would phase out existing user accounts in Mainland China” by 2022. Binance has also stopped users with Chinese phone numbers from signing up. Binance, Huobi and OKEx had previously been blocked by Chinese search engines.
At press time, the Bitcoin Fear and Greed index recorded a value of 27. Meanwhile, the Ethereum Fear and Greed Index checked in a value of 34. Both reported fear.
