$1B Bitcoin Exodus from Coinbase sparks market frenzy

Bitcoin ($BTC) whales, referring to investors holding substantial amounts of the crypto, have recently withdrawn over $1 billion worth of Bitcoin from Coinbase, one of the largest crypto exchanges globally. This significant movement of funds has sparked speculation within the crypto community and financial markets. 

The withdrawal of such a substantial amount of Bitcoin from a prominent exchange like Coinbase suggests several potential scenarios and implications, prompting analysis and debate among investors, analysts, and enthusiasts alike. 

Whales move $1B from Coinbase, what’s coming next?

Bitcoin holdings on the Nasdaq-listed crypto exchange Coinbase, the largest crypto trading platform in the United States, have dropped to their lowest level since 2017 as BTC whales began withdrawing cash into self-custody.

According to CryptoQuant statistics, whales – investors with enormous quantities of Bitcoin – have withdrawn over $1 billion in cryptocurrency from the platform in recent weeks, causing over 18,000 BTC to leave the exchange’s accounts.

According to prominent cryptocurrency analyst Ali Martinez, the shift corresponds to increasing buying activity by whales, who accumulated over 100,000 BTC in just ten days, valued at more than $5 billion.

Coinbase’s public order book now contains around 394,000 BTC, which is believed to be worth $20.5 billion.

Whales shifting their BTC holdings away from centralized exchanges are regarded as a bullish indicator because less Bitcoin is available for purchase. However, individuals on social media, such as X, are divided on the nature of the transactions. 

Some believe the assets are being transferred to custodial wallets in preparation of a price increase, as the forthcoming Bitcoin halving is only two months away, causing a supply shock. Others feel the transferred monies could be used to provide liquidity for over-the-counter (OTC) transactions.

BTC is currently trading around $52,000, up nearly 100% in the last six months due to the excitement surrounding the debut of spot Bitcoin exchange-traded funds (ETFs) in the United States, as well as the demand these funds generated for the cryptocurrency. According to BitMEX Research, these ETFs have received net flows totaling more than $4.5 billion since their inception.

Bitcoin accumulation attributed to the bull run

The demand for BTC is clear, as whales have participated in the highest level of activity witnessed in nearly two years. In 2024, significant investors with 1,000 to 10,000 BTC in their wallets had amassed around $13 billion in the asset. Meanwhile, individuals with 100 to 1,000 BTC decreased their holdings by $7.89 billion.

It’s unclear whether the BTC addresses of spot Bitcoin ETFs were included or removed from the data. Still, it demonstrates the increasing pressure on Bitcoin’s supply ahead of its planned halving event in April, which will cut the coinbase reward miners receive for finding blocks.

Anthony Scaramucci, founder of SkyBridge Capital, has maintained a projection of a big price increase for the crypto, claiming that the price at the time of Bitcoin’s halving, multiplied by four, predicts where Bitcoin’s price could go in that cycle. This logic leads him to conclude that his $170,000 price projection is conservative given the present market trend.

Currently, approximately 900 BTC are mined every day, whereas the Bitcoin ETF’s daily net inflows are approximately half a billion dollars, or approximately 9,650 BTC, despite Grayscale reporting roughly $100 million in daily outflows.

After the April halving, the daily number of BTC created will be cut to approximately 450 BTC, with institutional demand continuing to climb. This enormous supply-demand disparity has historically been positive for the Bitcoin price, with new all-time highs occurring within a year of the halving.