- CryptoQuant used on-chain data to dispel doubts about Tether’s BTC position.
- It says Tether might possess additional Bitcoin wallets beyond the one under scrutiny.
- On-chain data can also potentially lead to the wrong categorization of whale entities.
CryptoQuant, a prominent on-chain data and analytics provider, has taken to Twitter to dispel the doubts surrounding Tether’s position as the eleventh-largest holder of Bitcoin. The company determined to counter the week’s spread of fear, uncertainty, and doubt (FUD) with the power of its on-chain data.
CryptoQuant highlighted that Tether’s quarterly report unveiled a substantial stash of approximately $1.6 billion worth of Bitcoin. This figure propelled the stablecoin issuer to a top position among the crypto asset’s largest holders.
However, a scrutiny of the Tether Bitcoin holding wallet on Twitter raised some alleged discrepancies compared to the official disclosure. A noteworthy point was the absence of Bitcoin holdings in Tetherâs Q4 report last year. The absence contrasts with the wallet’s current accumulation trend.
Addressing these uncertainties, CryptoQuant suggests that Tether might possess additional Bitcoin wallets beyond the one under scrutiny. The analytics firm emphasized the reliability of on-chain data to corroborate news in times of doubt.
Meanwhile, CryptoQuant also noted a crucial blind spot when utilizing on-chain data to monitor the behavior of crypto whales. While the term “whales” conventionally denotes entities holding 1,000 or more Bitcoins, this categorization has a potential limitation, per the firm.
The cautionary note highlights the potential oversight of individual characteristics that might not align with the conventional definition of a ‘whale.’ A pertinent example is the misclassification of wallets on exchanges as whales when, in fact, they might be internal wallets.
CryptoQuant cited that periods from May to July witnessed substantial movements in the range of 1,000 to 10,000 Bitcoins and more. According to the firm, exchange withdrawals experienced a notable spike. However, the surge in activity was predominantly linked to wallet transfers within the Robinhood exchange.
Ultimately, while on-chain data is a powerful tool for scrutinizing crypto market dynamics, there is a need for careful categorization of entities as ‘whales’ to avoid misinterpretation of the results.
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