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posted ago by ThankGod ago by ThankGod +46 / -0

What?

As CoinDesk’s Muyao Shen reported Wednesday, a buyer or a group of buyers entered an order on a centralized exchange to buy $1.6 billion worth of bitcoin.

Where?

The price of bitcoin on Coinbase relative to other exchanges rose sharply as the trade was underway, leading some to speculate that the regulated U.S. exchange was the platform where the transaction happened. However, a little more digging into the data places the trade in Asia.

Three exchanges saw particularly large volumes in their perpetual futures contracts, according to Ki Young Ju, CEO of data provider CryptoQuant. Those three – Binance, Huobi and ByBit – while not technically based in China, have long had ties to the country, where yet another crackdown on crypto was recently announced.

When?

It’s an eerie coincidence a trade of this magnitude happened on exchanges with ties to Chinese customers in the middle of a week beset by capital market woes in that country.

This is a roundabout way of saying there’s some serious contagion going on in the Chinese real estate market. That’s not good for the country’s economy given that roughly one-third of its economic activity is related to the real estate sector, whereas it’s only one-sixth or so for the U.S.

How? But wait, there’s more!

While the purchase is denominated in the press as $1.6 billion, it wasn’t actually $1.6 billion in greenbacks paid for bitcoin.

For one, if CryptoQuant’s Ki is correct, this was first done in the perpetual futures market, not the cash market. That means actual bitcoin may not have gone to the initial buyer. Nonetheless, it will have an effect on the cash market because the two move in tandem.

Also, dollars themselves were most likely not the currency used but instead the transaction appears to have been largely done using the stablecoin USDT, issued by Tether, which was an on-ramp for many in China to trade on exchanges like Binance or Huobi.

“Most trading volume was from BTC/USDT,” Ki told CoinDesk regarding Wednesday’s trade, “which means buyers already had USDT coins.”

A look at trading volumes on data site CryptoCompare.com shows that at the time the trade occurred, the pair of BTC/USDT outpaced BTC/USD (bitcoin for the U.S. dollar) by roughly 2-to-1.

Another odd coincidence? Remember a minute ago when we talked about Chinese corporate debt? Here’s something interesting: On Thursday, BloombergBusinessWeek released its cover story, “Anyone Seen Tether’s Billions?” Toward the end, author Zeke Faux writes, curiously:

“After I returned to the U.S., I obtained a document showing a detailed account of Tether Holdings’ reserves. It said they include billions of dollars of short-term loans to large Chinese companies – something money-market funds avoid. And that was before one of the country’s largest property developers, China Evergrande Group, started to collapse.”

https://finance.yahoo.com/news/bought-1-6b-bitcoin-wednesday-155000568.html