Mysterious Whale Accumulates $118M in Wrapped Bitcoin Amid Controversy

An unknown whale wallet has made headlines recently for acquiring over $118 million worth of Wrapped Bitcoin (WBTC) within a single week, as reported by Lookonchain. 

This massive staking of Wrapped Bitcoin occurs at a time when there has been increased concerns on ownership of the token especially after critical decisions have been made within the crypto community.

Whale Activity and Wrapped Bitcoin Accumulation

In a recent update posted on X, blockchain analytics firm Lookonchain detailed that the unidentified wallet had acquired more than 347 coins of Wrapped Bitcoin, equivalent to about $16 millions, within just 12 hours. This activity contributes to an increasing total of 1,953 WBTC which they purchased at an average price of $58,853, a proof of confidence in the asset by an unidentified buyer.

The surge in Wrapped Bitcoin purchases occurs amid ongoing debates concerning the token’s control and security. On the same day, August 9, BitGo, the company which oversees Wrapped Bitcoin, stated that they would delegate control of WBTC to a consortium consisting of BitGo, Hong Kong-based investment manager BiT Global, and Justin Sun’s Tron ecosystem. This strategic shift has raised concerns within the crypto community, thus sparking multiple reactions and discussions.

MakerDAO Takes Action

After BitGo’s announcement, days later, a proposal was made in MakerDAO’s forum by crypto risk management firm Block Analitica, calling on the MakerDAO protocol to stop approving new WBTC debts and limit the creation of new borrowings based on WBTC. By August 16, MakerDAO had implemented the proposal, which prohibited the borrowing of WBTC on the Sparklend platform, an important step due to the token’s popularity in DeFi.

Additionally, the lending platform, Aave, seems ready to provide an alternative to WBTC borrowing and lending, potentially through Threshold Network’s TBTC. This step may be in response to rising questions or doubts regarding WBTC and its potential.

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Adding to the unfolding drama, U.S. crypto exchange Coinbase has hinted at an upcoming product called “cbBTC,” widely speculated to be an alternative wrapped Bitcoin token. Rena Shah, COO of Bitcoin software firm Trust Machines, commented on the potential implications of cbBTC, explaining, “The opportunity for cbBTC, based solely on current Coinbase users, is a massive onboarding opportunity for Bitcoin DeFi.” This could lead to broader adoption of Bitcoin-native decentralized finance solutions.

While some investors express uncertainty regarding WBTC, others are confident about promising alternatives in the market. For instance, during the second week of August 2024, several crypto whales demonstrated their optimism by investing in various altcoins, despite the bumpy market conditions.

Crypto Whales Bought These Altcoins in the Second Week of August 2024

According to BeInCrypto, crypto whales have shown particular interest in three notable altcoins: Litecoin (LTC), Polygon (MATIC), and Avalanche (AVAX). Their purchases appear to reflect a belief that the broader cryptocurrency market may soon recover significantly.

Litecoin (LTC)

Interestingly, litecoin has gained popularity out of the numerous cryptocurrencies and is currently a favorite of some whales. Compared to Bitcoin, it is seen as a kind of simplified version of the world’s leading cryptocurrency. Looking into IntoTheBlock, there is a lot of striking enhanced desire originating from large holders with netflow that depicts the change in possession of 1% holders circulating supply and above. A rise in this figure generally indicates accumulation, and LTC’s price has increased by approximately 8.82% within the past week, currently trading around $65.50. If such a trend persists, LTC may even compound its recent rally.

Polygon (MATIC)

Polygon has also garnered a fair share of interest even if price movements have lacked vigor. The on-chain analytics from Santiment showcased that the bigger addresses have been stacking up their MATIC, probably in preparation for the transition from MATIC to POL set for September 4th. This transition should improve its standing within the Polygon ecosystem; however, MATIC experienced a decrease of around 4.72% this week.

Avalanche (AVAX)

Lastly, AVAX, the token associated with the Avalanche smart contract platform, has also witnessed a significant increase in whale transactions. Its Large Holders Netflow has risen by approximately 36% to indicate that whales are holding more AVAX. However, its price recently declined by about 3.18%, possibly due to an anticipated token unlock on August 19, which often results in increased supply and potential selling pressure.