Market participants shared concerns that cryptocurrency lender Celsius might sell $500 million Bitcoin BTC/USD transferred to FTX on Thursday.
What Happened: The Celsius Network sent 24,462 Wrapped Bitcoin WBTC/USD to crypto exchange FTX, according to a transaction flagged by blockchain tracker Whale Alert.
WBTC is a tokenized version of Bitcoin on the Ethereum ETH/USD blockchain. In this context, the WBTC is likely the collateral Celsius reclaimed after it repaid a $41.23 million loan to Maker earlier in the day.
The 21,962 WBTC unlocked from paying off the remaining DAI loan has already found its way to FTX...— Airdawg (@Colwellinvestor) July 7, 2022
that didn't take long...
Incoming $BTC dump? https://t.co/A9B9YaLQ1W#CelShortSqueeze = #CelPumpAndDump
Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
When a crypto is sent to an exchange in bulk, most traders interpret the transfer as a sign of incoming selling pressure. In this case, many investors believed that Celsius had transferred the WBTC to FTX with an intent to sell.
“They are likely going to sell it and possibly use it to provide some liquidity on their platform,” wrote one user on Twitter.
Other investors believed that it was unlikely that such a large amount of WBTC would be sold directly in the market.
“Even if it’s sold it’ll be OTC. everyone who thinks it’ll be dumped on the market is out of their mind,” said another user on Twitter.
Price Action: According to data from Benzinga Pro, BTC was trading at $21,540 at press time, up 5% over the last 24 hours.
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