Analyst Identifies BlockFi as the Initiator of the 18,000 BTC Transfer to Gemini Wallets

Leading Coin Metrics researcher Antoine Le Calvez has determined that the transfer of 18,000 BTC (~$1 billion) to Gemini wallets was carried out by a client of Gemini Custody — BlockFi.

It’s BlockFi’s wallet

— Antoine Le Calvez (@khannib) March 16, 2021

Earlier, analysts at Glassnode and CryptoQuant clashed over the causes of the sharp market downturn. Ki Young Ju, head of the latter company, saw this as the result of whales moving a large tranche of bitcoins, including onto the Gemini cryptocurrency exchange 15 March.

$BTC dropped -10% after this signal.

Chart 👉 https://t.co/oIVOklOjbC https://t.co/Fs1kkFYBw0 pic.twitter.com/Ay3lKrIzO2

— Ki Young Ju 주기영 (@ki_young_ju) March 15, 2021

His opponents labeled the hypothesis as untenable. They pointed to the absence of significant changes in the order books, which indicated an internal transfer (between hot wallets).

We have been receiving messages asking about large #BTC inflows into Gemini.

Clarification: This is incorrect, the reported transactions were internal. Those are funds that were already on the exchange’s wallets, and were simply transferred internally.https://t.co/o1kYsHMCuo pic.twitter.com/GjecVFfX8Y

— glassnode (@glassnode) March 15, 2021

Independent analyst Willy Woo weighed in on the debate. His analysis suggested that the transfer was executed by an infrastructure player similar to an exchange.

Woo questioned CryptoQuant’s conclusions and noted that the signal could have prompted 28,300 subscribers of the service. According to the analyst, this is the second such episode in the last 30 days.

The @cryptoquant_com “data error” debate.

Did a whale send in 18k of BTC into Gemini to dump the markets? Or was it a data error?

This alert was sent out to 28,300 traders warning of whale dumping. Speculators sold off minutes later. pic.twitter.com/OOjRTvXm49

— Willy Woo (@woonomic) March 16, 2021

Antoine Le Calvez confirmed Ki Young Ju’s assessment.

The sender was BlockFi. Here’s the visualization pic.twitter.com/VUKGIyHc3n

— Ki Young Ju 주기영 (@ki_young_ju) March 16, 2021

Glassnode declined to admit its fault. In a new thread, the analysts explained that, in the context of their conservative address-labeling philosophy, they identified the cluster as a major financial-services provider that uses Gemini as custodian.

For this reason, the experts interpreted the transfer of 18,000 BTC as part of an extended (internal) cluster, rather than funds deposited for trading on a spot exchange.

5/ It is at the core of our philosophy to optimize for very high precision and reduce false positives.

Hence we are conservative with labelling addresses and reporting of data points that are outside the essence of the metric at hand – context is key.

— glassnode (@glassnode) March 16, 2021

CryptoQuant disagreed, insisting that technically this was an “external transfer”.

1/ Technically, it was an «external transfer» from BlockFi to Gemini.

Despite BlockFi uses Gemini’s custody wallets, it’s not the right approach to cluster them into a single entity as flows in BlockFi and flows in Gemini have different patterns. https://t.co/PA3v3GBE7F

— CryptoQuant.com (@cryptoquant_com) March 16, 2021

In Woo’s view, Le Calvez’s conclusions align with his hypothesis of actions by an “infrastructure player.”

CoinMetrics: «It’s BlockFi»

No validating proof was given, but the wallet above did look like an infrastructure entity. pic.twitter.com/PNqAQ3ucn8

— Willy Woo (@woonomic) March 16, 2021

Users also debated the event. One commenter noted that CryptoQuant’s “bogus data” ultimately paid off, while others in the debate sought the truth. Another saw a self-fulfilling prophecy in the traders’ actions.

weak hands responded to an alert based on bogus interpretation of real data

— Chad (@bittychad) March 16, 2021

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