Binance witnessed a spike in volume in the past 24 hours. Data from the exchange shows that $1 million in BTC was bought per second in a series of high volume trades. This was reported by Eric Weiss, the CEO of Bitcoin Investment GRP, via a Twitter post on July 8. According to the post, $1 million worth of BTC was bought in quick succession by a user at Binance.
Binance CEO Reacts
In his response to the unusual high BTC volume on the exchange , the CEO of Binance, Changpeng Zhao, said that there are users who are striving to gain VIP status on the exchange and attributed the spike in the volume of BTC to this. CZ also said that the exchange would exclude spot trades on BTC from the scheme. He also noted that the new zero fee regimen could be responsible for the trend. He also pointed out concerns about wash trading on the exchange as a direct consequence.
Think this is due to zero fees and people trying to gain VIP tiers. We will exclude Btc trading from VIP calculations. Remove all incentives to wash trade. Announcement with details coming shortly. https://t.co/5wm4uPAudX
— CZ 🔶 Binance (@cz_binance) July 8, 2022
Udi High, a de-fi expert said that he noticed a $6 billion trade on the platform. They concluded that this could be an institutional purchase.
$3 Billion in An Hour
In a follow up comment, Weiss said that he has seen $3 billion BTC purchase in an hour on Binance. Despite the high volume witnessed at the exchange, the price of BTC has not seen a radical change in the past 24 hours. Data from Coinmarketcap confirms that the price of BTC is still just above the $21k range after a high of around $22k on July 8.
Mark Moss, the host of iHart, the syndicated radio show said that the current price level of BTC is attractive to many big investors at this time.
Wash Trading is Illegal in The US
It is not clear if one entity is responsible for selling the BTC. However, wash trading is illegal in the United States. This was the view of Sam Fisher. According to him,
“Wash trading is illegal under U.S. law, and the IRS bars taxpayers from deducting losses that result from wash trades from their taxable income.”
It is interesting that there has been no price disruptions despite the large volume trades seen at Binance on Friday.