A Reddit user , Makoveli, pointed to some interesting transfers from Coinbase, possibly made by a whale, that occurred on June 3. 25,000 BTC, worth roughly $215 million, was moved to Coinbase, where it was sold – only to be bought back for $200 million, with the whale likely pocketing the difference.
Makoveli is clearly onto something here, as the move began about half an hour before the market dump. The short time frame in which the buys and sells occurred point to this being a act with the deliberate intention of forcing a profit. This is nothing new for crypto, but as the Reddit user points, it is to the detriment of the many investors who hold smaller amounts of crypto.
1. 25,000 BTC Gets Moved to Coinbase
The market began sliding towards the end of June 3, when it dropped from $8,500 to just under $8,000, where it still remains at the time of publishing. Shortly after the price began sliding, a whale moved over 25,000 Bitcoins (roughly $215 million) to a Coinbase wallet. Such a large transfer, except in some circumstances, is a signal that a large sell is about to take place, and that is precisely what happened.
2. Funds Moved to Two Separate Wallets
Once the price had gone down, the whale saw the opportunity to buy back the 25k BTC for a lower price. One transfer of 14,000 BTC and another of 11,000 BTC were made to two separate wallets, which amounted to $200 million. The two transfers were separated by roughly 40 minutes. Now the whale had not only the same amount of BTC, but a staggering $15 million profit, having managed to sold high, bought low.
3. $10 Million Worth of USDT Moved
Finally, it was noticed that $10 million worth of Tether (USDT) had been moved to another wallet. Makoveli says,
If you do a little math and follow the timeline, it’s not hard to see that someone dumped 25k BTC for $215M and bought it back shortly after for $200M. In doing so, they pocketed $15M and walked away with the same amount of BTC as they started with.
The inference is clear: someone dumped $213 million worth of BTC, bought it back at $200 million, and pocketed the difference. This sort of behavior happens quite frequently in the crypto space and it has long been the subject of criticism. There has been some debate as to how much whales influence the market, but there is no way of quantifying the effect, and the whales themselves are subject to risk with their actions.
The market is without a doubt prone to manipulation – it is largely unregulated, after all – and savvy investors have devised ways to make the most out of it. Perhaps, with regulation steadily forming, it will make trading a little more fair to the average joe.