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Binance exchange recently made a massive Ethereum (ETH) movement, sparking discussions within the crypto community. Whale Alert, an on-chain platform that reports large crypto transactions, spotlighted the huge Ethereum transfer from Binance.
Why huge Ethereum movement?
According to Whale Alert, Binance transferred 80,000 ETH to a Binance Beacon Deposit address. The 80,000 ETH were valued at more than $249,000,000 at the time of transfer.
The Beacon Deposit is tied to Ethereum's proof-of-stake (PoS) system. Binance operates its own staking service for Ethereum users.
Typically, when ETH is sent to a Binance Beacon Deposit address, it means the funds are being moved to stake on the Ethereum network.
Staking locks up ETH to help secure and validate the blockchain, earning rewards. For Binance specifically, this often supports their staked ETH products. The exchange allows users to stake their coins and still use them for derivatives of the assets.
Considering this, many market participants think the 80,000 ETH transfer is not a user withdrawal or sale. Rather, they argue it is internal rebalancing or cold storage moves.
Binance periodically transfers ETH from its exchange wallets to staking deposit addresses. The goal is to participate in Ethereum staking for yield or fulfill user staking requests on their platform.
The exchange also commits capital long term, reducing the circulating supply temporarily.
Notably, the $249 million ETH transfer from Binance coincides with a spike in staking interest among investors. Last week, entrepreneur and investor Ted Pillows disclosed that the Ethereum entry queue surged 237 times higher than the exit queue.
Additionally, the ETH treasury firm BitMine has increased staking of the altcoin over the past few weeks. In just two days, Bitmine staked 342,560 ETH, valued at about $1 billion, according to on-chain data.
Bullish for Ethereum price?
Note that locking or staking large amounts of ETH reduces available supply for trading. It shows confidence in Ethereum's long-term ecosystem and price trajectory.
If demand for ETH increases, and supply remains low, the price could easily climb to higher levels.
Still, the Binance transfer does not necessarily mean a sudden market shift unless part of a bigger pattern. At the moment, the ETH price looks ready for a big move as the coin has already increased slightly by 0.1% over the previous day.
Besides, investors have shown interest in accumulating the coin, as indicated by the surging trading volume. This metric increased by more than 165% to $17.37 billion over the past day.
Godfrey Benjamin
Gamza Khanzadaev
Alex Dovbnya
Tomiwabold Olajide