Someone moved $1 billion in a single bitcoin transaction

We don’t know who was responsible for the massive transfer of 94,504 bitcoins.

Holders of large amounts of bitcoin are known as "whales."
Enlarge / Holders of large amounts of bitcoin are known as “whales.”
Jenny Evans/Getty Images

Late on Thursday night, US Eastern time, someone made one of the biggest transactions in bitcoin history: 94,504 bitcoins. At the then-current bitcoin price of around $10,600, this transaction was worth almost exactly $1 billion. It’s now worth around $967 million.

Bitcoin’s shared transaction ledger is open, but addresses are anonymous by default. As a result, we know that the transaction occurred, but we don’t know who made it or why. One analysis indicated that at least a third of the money comes from Huobi Global, a cryptocurrency exchange based in Singapore. So the transaction could reflect big withdrawals from a Huobi customer—or it could mean that Huobi itself was consolidating some of its deposits.

This isn’t the largest transaction in bitcoin terms. In 2013, for example, someone moved 194,993 bitcoins in a single transaction. But bitcoins were much less valuable back then, so the transaction was only valued at around $150 million.

An even larger 2011 transaction moved 550,000 bitcoins. But with bitcoins only worth around $3 at the time, this represented around $1.5 million at the time.

However, I can’t find any previous examples of bitcoin transactions where the dollar value exceeded $1 billion.

Whoever initiated the $1 billion transfer paid a transaction fee of 0.065 bitcoins—around $690 at the time of the transaction.

BITCOIN PRICE PREDICTION OF $250,000 IS ‘CONSERVATIVE’, CLAIMS BILLIONAIRE INVESTOR TIM DRAPER

Prominent investor Tim Draper has predicted bitcoin will experience huge price gains over the next four years, claiming the cryptocurrency grow more than 25-fold by 2023.

The venture capitalist said he may have underestimated bitcoin when he previously predicted it will reach $250,000 (£201,000) – a figure he first forecast when bitcoin was worth around $5,000 in 2018.

A remarkable resurgence in 2019 means bitcoin is currently trading at just above $10,000, though it remains a long way off its record high from December 2017 of nearly $20,000.ADVERTISING

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Speaking to cryptocurrency news show Blocktv, Mr Draper said his previous price predictions had come true and that his latest one may even fall short of bitcoin’s eventual value.

“$250,000 means that bitcoin would then have about a 5 per cent market share of the currency world and I think that may be understating the power of bitcoin,” he said.

“As it becomes easier for people to use… they’re going to make the decision that they like bitcoin better than any fiat because they know that their fiat will depreciate in value.”

Satoshi Nakamoto creates the first bitcoin block in 2009

Mr Draper made a name for himself through traditional investments in companies like Skype, Tesla and Twitch, but has since turned his attentions to bitcoin.

In 2014, he purchased 30,000 bitcoins that had been seized from criminals by the US Marshals, which were worth around $21 million at the time. At today’s rates, they are worth more than $300 million.

He has since been an outspoken advocate of the cryptocurrency, consistently claiming it represents the future of money.

Other financial analysts have also predicted that the price of bitcoin is set to increase, though their market projections have been far more modest.ADVERTISING

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Nigel Green, the CEO of financial consultancy firm DeVere Group said that bitcoin’s price will be boosted by the US Federal Reserve, which is expected to cut interest rates by around a quarter of a per cent this week..

“Bitcoin is likely to break out of its recent sideways trading pattern and be given a healthy boost by the Fed’s rate cut,” he told The Independent

“This is because an interest rate cut reduces the incentive to keep the fiat currency. In addition, rate cuts typically lead to higher inflation, which reduces the purchasing power of traditional currencies, therefore making cryptocurrencies more attractive.”

Bitcoin price predictions range from $1 million to next to nothing (Getty Images)In August, Mr Green predicted that geopolitical instability would see bitcoin hit $15,000, as bitcoin was becoming a “flight-to safety” asset during times of market uncertainty.

He cited the ongoing trade war between the US and China, as well as the unpredictable outcomes of the Brexit crisis in the UK and Europe.

He stood by this forecast following the anticipated interest rate cuts, adding that cryptocurrencies will “continue to do well as the global economy slows and central banks ease monetary policies in response to this”. 

Mr Green is joined by several other industry figures in predicting short-term gains, with some pointing to the record bitcoin mining rates in recent days acting as a key metric towards future gains. 

Changpeng Zhao, CEO of one of the world’s largest cryptocurrency exchanges Binance, tweeted this week: “[Mining] hashrate increase means more miners are investing in btc, they are bullish. You know what follows?”

Bitcoin’s Record Hash Rate May Hint at Price Gains to Come

Omkar Godbole

 Sep 16, 2019 at 11:00 UTC
Updated Sep 16, 2019 at 12:50 UTC
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  • With the hash rate or miner’s confidence hitting record highs, bitcoin’s three-day narrowing price range looks set to end with a bullish breakout.
  • A range breakout would open the doors to $10,956 – the bearish lower high created on Aug. 20.
  • A break below Friday’s low of $10,154 would confirm a range breakdown and could yield a sell-off to $9,855 (Sept. 11 low).

Bitcoin’s latest bout of consolidation may end up with bullish breakout, as a key metric of miner confidence has hit all-time highs.

The top cryptocurrency by market value has clocked lower daily highs and higher daily lows over the last three days and is currently trading at $10,300 on Bitstamp, little changed on a 24-hour basis.

The cryptocurrency has charted the narrowing price range amid a surge in non-price metrics including a rise in the network’s hash rate – a measure of the computing power dedicated to mining bitcoin.

Notably, the two-week average hash rate reached a record high of 85 exahashes per second (EH/s) around 19:00 UTC on Friday. Further, mining difficulty – a measure of how hard it is to create a block of transactions – also jumped to a new all-time high of nearly 12 trillion.

Hash rate can be considered a barometer of miners’ confidence in the bitcoin price rally. After all, they are more likely to dedicate more resources to the computer intensive process that secures the network and processes transactions if they are bullish on price. Miners would likely scale back operations if a price slide is expected.

Hence, many observers, including the likes of Changpeng Zhao, CEO of Binance, and former Wall Street trader and journalist Max Keiser believe prices follow hash rate.

Zhao tweeted on Friday that, a rising hash rate means “more miners are investing in BTC,” while few other observers stated that sellers should think twice before betting against the most secure blockchain (the higher the hash rate of a cryptocurrency network, the more expensive it is to attack).

It is worth noting, though, that the market is divided on the relationship between price and hash rate.

Some observers believe the hash rate follows price and the metric’s stellar performance represents overtly exuberant miners.

That said, the price is likely to follow the hash rate this time, as over-exuberance is typically observed at market tops or near record highs. As of now, BTC is down almost $10,000 from the record high of $20,000 reached in December 2017.

Further, with the next reward halving (supply cut) due in less than a year, market sentiment is quite bullish. The sustained uptick in miners’ confidence is more likely to draw fresh bids, possibly leading to a positive feedback loop.

Daily and 4-hour charts

Bitcoin has charted (above left) back-to-back inside bar candlestick pattern on the daily chart over the last three days. The first inside bar appeared on Friday as that day’s high and low fell within Thursday’s trading range. The second and the third inside bar candle was created on Saturday and Sunday, respectively.

Inside bars indicate consolidation and lack of volatility, often ending with an explosive move on either side. A break below the first inside bar’s (Friday) low of $10,154 would imply range breakdown and could yield a stronger sell-off to levels below $9,855 (Sept. 11 low).

A break above Friday’s high of $10,458 would imply range breakout and open the doors to $10,956 (July 20 high).

The falling wedge breakout confirmed on the 4-hour chart (above right) last week is still valid. So, the probability of range breakout is high.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View