The field of trade is constantly changing and full of swift. Surprises are common here, such as last week. On Wednesday, $1.6 billion worth of bitcoin was bought by someone in minutes. The representatives of the trade sphere have one question – why?
It is noteworthy that many consider this purchase a minor signal; however, it may not seem so insignificant at first glance. There may be more complex answers beyond the relatively small cryptocurrency world than it appears at first glance.
The buyer or group of buyers reportedly filed a bid for $1.6 billion worth of Bitcoin on the Central Exchange. This amount is about 4.5% of the average daily volume for two months.
With so many deliveries in the market in five minutes, quite a few things can happen on a single exchange. This boosted Bitcoin prices by almost 5%, to $55,500.
A buyer with a long-term perspective may become more cautious if his goal is to enter at the best price to reduce risk. With a large purchase, completing each offer will eventually push the transaction price higher and higher.
When MicroStrategy bought $450 million in Bitcoin, the company did it in five months. Although the price eventually rose over several months, each trade did not lead to the recorded rate last Wednesday.
Last week’s incident was utterly different from that fact. Wednesday’s buyer was in a hurry to finish trading.
It should be noted that compared to other exchanges on Coinbase, the price of Bitcoin in the trading process increased sharply. This led to the assumption that the US-regulated exchange was the place where the transaction happened.
The dominance of trading volume for Coinbase has been increasing recently. However, it is not high compared to the beginning of the year.
This scale of trade took place during the exchange of connections with Chinese consumers. Two days before the deal, a real estate developer in China defaulted on $206 million worth of bonds, which led to a downgrade of the company. The situation was not limited to just one company. Standard & Poor’s has brought down Chinese developer Sinic. Of course, these events do not sound so loud compared to Evergrande. Evergrande shares were also suspended on Monday.
Another primary real estate developer, Chinese Estates Holdings, a significant investor in Evergrande, decided to go private on Thursday after the market closed more than 40%.
It seems that there is a severe crisis in the Chinese real estate market. This is not good for the country’s economy, given that a third of the country’s economic activity is related to the real estate sector, while for the US, this sector is only a sixth.
It should be noted that although the purchase was announced in the press for $1.6 billion, this amount was not paid for Bitcoin.
If we rely on CryptoQuant’s Ki, this was done for the first time in the permanent futures market and not the money market, which means that Bitcoin may not go with the initial buyer. However, this purchase will inevitably affect the money market.
Also, suggesting that the dollar was not used as an estimated currency, the transaction appears to have been primarily carried out using the USDT issued by Tether, which for many in China was a way to trade on exchanges such as Huobi and Binance.
According to a record by Tether Holdings, the company combines billions of dollars in short-term credits with giant Chinese corporations.
Tether opposed Evergrande’s debt. However, the company’s lawyer dismissed to say whether Tether had any other Chinese financial paper. He said most of his commercial work is highly rated by credit rating firms.
If Tether is exposed to the Chinese credit market, they might be motivated to download the USDT. Even $1.6 billion.
However, this is only a guess because the identity of the suspect in action and the identification of the sales representative have not been clarified so far.
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