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Cryptocurrency News Articles
Bitcoin Exchange Whale Ratio Shows Coinbase Is Now The Undisputed King Of The Whales
Oct 18, 2024 at 06:30 pm
In a new post on X, CryptoQuant community manager Maartunn discussed which exchange is currently number one in the Bitcoin Exchange Whale Ratio.
CryptoQuant community manager Maartunn recently shared a post on X, discussing which exchange currently holds the number one position in the Bitcoin Exchange Whale Ratio.
The “Exchange Whale Ratio” in this context is an indicator that tracks the ratio between the sum of the top 10 exchange inflows and the total exchange inflow for a given platform.
The ten largest inflows to an exchange are typically attributed to whale entities, making this metric valuable in understanding the proportion of total platform inflows that these humongous investors account for.
Here’s a chart shared by Maartunn, showcasing how the Bitcoin Exchange Whale Ratio has changed for major exchanges in the sector over the past decade.
In the graph, a blue shade corresponds to Bitcoin Exchange Whale Ratio values close to 0, a red one to those around 0.5, and a yellow one to those near 1. While most exchanges have a shade of blue, Coinbase stands out for having a consistent yellow streak for a while now.
This suggests that the whales make almost all the BTC inflows going to Coinbase. In contrast, the other exchanges have seen a dominance of retail exchange inflows, including Binance, the largest cryptocurrency platform in terms of trading volume.
The chart shows that Coinbase has been dominating in terms of whale activity this year, but this wasn’t always the case. One event that seems to be linked to the platform’s growth as the home to the whales is the launch of the spot exchange-traded funds (ETFs).
The spot ETFs finally gained approval from the US Securities & Exchange Commission (SEC) at the beginning of this year. Since then, these new financial instruments have become popular among investors.
A spot ETF allows investors to gain indirect exposure to BTC’s price movements without having to own any real BTC tokens. The spot ETFs purchase and hold coins on behalf of their users instead.
Now, the spot ETFs need to securely store this BTC somehow, and for this purpose, most of them have chosen Coinbase as the custodian. This unique position that the platform has acquired in the sector could explain why the platform’s inflows have been so whale-heavy this year.
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