CryptoQuant, a provider of on-chain data and analytics, has raised questions about the claims that Tether, a major stablecoin issuer, has become the 11th largest holder of Bitcoin in the world. According to recent insights, while on-chain data offers a unique lens for tracking whale behaviors and verifying news, it may also possess certain blind spots that could lead to potential misinterpretations.
1-3/ Can we verify @Tether_to being the 11th largest #Bitcoin holder with the on-chain data?
— CryptoQuant.com (@cryptoquant_com) August 10, 2023
4-6/ What is the blind spot of on-chain data when monitoring #Whales' behavior?
Let's BUST this week's FUDs with our on-chain data.
Thread🧵
According to CryptoQuant, a recent quarterly report from Tether revealed it holds an estimated $1.6 billion worth of Bitcoin. However, the specifics of its holdings have been shrouded in some mystery. Although the stablecoin issuer has not officially disclosed its Bitcoin addresses, research analysts and investigative reports have tried to track down potential wallets associated with the company. Tom Wan, an analyst at 21.co, claims to have identified a Bitcoin address linked to Tether that contains roughly 55,022 bitcoins, valued at around $1.6 billion.
1/ .@Tether_to BTC balance increased by $176M compared to last q
— Tom Wan (@tomwanhh) August 4, 2023
– Using the price as of 30 Jun, it is estimated that they hold ~55,022 BTC
– Last Q, I mentioned the below address could belong to Tether:
bc1qjasf9z3h7w3jspkhtgatgpyvvzgpa2wwd2lr0eh5tx44reyn2k7sfc27a4 pic.twitter.com/90DGmqQvLS
However, a point of contention arises from CryptoQuant’s observation: a discrepancy exists between the described Bitcoin holdings in Tether’s report and what’s evident in the speculated Bitcoin holding wallet, particularly regarding its transaction history. This leads to the speculation that Tether might operate multiple Bitcoin wallets, suggesting the complexity and nuance in trying to track large entities’ holdings based solely on on-chain data.
One significant oversight often made in the on-chain analysis is the misclassification of entities. Often, entities holding 1K+ Bitcoins are labeled as ‘whales,’ but this categorization can miss nuanced distinctions. A prime example is the potential mislabeling of “wallets on exchanges” as whale wallets when they might simply be internal wallets of exchanges.
Additionally, between May and July, there was a notable movement in the 1K to 10K and 10K+ Bitcoin range. Alongside this, a surge in exchange withdrawals was witnessed. Interestingly, much of this activity is believed to be connected to wallets within the Robinhood application, which saw one Bc1 wallet amass 118,300 Bitcoins in about three months, according to the analytic firm.
