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Bitfinex Accumulating Ethereum (ETH). Three Possible Reasons Revealed by Analyst

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Wed, 05/13/2020 - 11:35
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Vladislav Sopov
Prominent cryptocurrency analyst Elias Simos, a senior researcher at Decentral Park, has noticed an interesting process in the Bitfinex crypto exchange's Ethereum storage
Bitfinex Accumulating Ethereum (ETH). Three Possible Reasons Revealed by Analyst
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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.

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.

Related
Ethereum (ETH) 2.0 News: Multi-Client Testnet, Security Audit, New Platforms
 

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.

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About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)