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The Whale Alert transaction tracker bot has exploded earlier today after more than 1.25 million Ethereum were transacted from the "unknown wallet" to the Kraken centralized exchange. Here's what is behind those transactions.
According to the transaction page, $6 billion worth of Ethereum have been transferred from the anonymous wallet. But if we check each transaction on the Etherescan blockchain explorer, 100% of funds have been transacted from the Kraken cold wallet.
The large volume is explained by the increasing fund's inflows, which were present since the beginning of September. Users continuously withdraw their funds from exchanges due to the strong bullish trend on the market and the deflationary path of Ethereum.
? ? ? ? ? ? ? ? ? ? 128,733 #ETH (609,204,586 USD) transferred from unknown wallet to #Krakenhttps://t.co/GNaPyQh1Fx
— Whale Alert (@whale_alert) November 15, 2021
To provide enough liquidity, the exchange will inject funds that will be used by market makers. The tracked sum is approximately 40% of the current daily trading volume, which means if these funds are to be used for selling, Ethereum's price is more likely to plunge significantly.
Exchanges are using cold wallets to safely store users' assets without putting them at risk of being hacked or stolen. Some part of the funds remain on the exchange's hot wallets to be used on an immediate request. Cold wallets provide more security in exchange for the inability to access funds immediately due to them being stored on a device that is not constantly connected to the network.
Tomiwabold Olajide
Alex Dovbnya
Godfrey Benjamin
