The Bitfinex multi-currency crypto exchange reached a crucial milestone in Ethereum (ETH) accumulation. It can’t be an accident, the analyst highlights.
Every DeFi surpassed by single exchange
Based on the data provided by the Glassnode on-chain analysis vendor, Elias Simos announced that Bitfinex has been increasing its Ethereum (ETH) holdings since mid-March.
There is now more $ETH locked in @bitfinex than in the whole of #DeFi (source: @glassnode)
— Elias Simos (@eliasimos) May 12, 2020
Since mid-March, the balance of ETH on Bitfinex has increased from ~2.5M to ~4M ETH. Over the same period, ~3B Tether has printed on the Ethereum chain.
Is Tether eating Ethereum…? pic.twitter.com/tJuKikcn9R
The Ethereum (ETH) balance on the service surged almost 60%, just barely touching the insane 4M Ether level. This number is significantly more than the whole DeFi sector has managed to allocate.
This meaningful process is taking place hand in hand with Tether (USDT) printing on top of the Ethereum (ETH) blockchain. Previously, the ERC-20 version of USDT was considered a pale imitation of its Omni (Bitcoin-based) analogue.
But eventually, the Ethereum-based Tether (USDT) surpassed its predecessor. Now 6B USDT is being printed on the Ethereum (ETH) network. Almost half of this impressive amount was put into circulation after Black Thursday.
Three hidden reasons
Elias Simons has offered three possible explanations for this process, which is accompanied by a decrease in the Bitfinex Bitcoin (BTC) balance.
First of all, it could mean that Bitfinex is scheduling large-scale participation in Ethereum (ETH) 2.0 staking. Such a huge stake may result in a big influence from Bitfinex in the future proof-of-stake network.
Also, Bitfinex may target better funding rates for Ethereum (ETH) stakers than in the DeFi market.
Furthermore, Bitfinex may be stockpiling Ethereum (ETH) to cover gas costs for maintenance of the ERC-20-based Tether.
Alex Dovbnya
Tomiwabold Olajide