In the world of cryptocurrency, a whale is a term used to describe an individual or an entity that holds a large amount of a certain coin or token. Whales can have a significant impact on the market, as their actions can cause price movements, liquidity fluctuations and market sentiment shifts.
In a surprising move, a BNB whale who had been holding more than 1 million BNB tokens for over two years decided to sell them on June 10th, 2023. The whale, whose identity is unknown, dumped his entire stash on Binance, the largest cryptocurrency exchange and the issuer of BNB.
According to data from Etherscan, the whale transferred 1,001,000 BNB from his wallet to Binance on June 10th at 12:34 UTC. At that time, the price of BNB was below $300, meaning that the whale cashed out over $300 million in one transaction. The whale’s wallet address was first spotted by Whale Alert, a service that tracks large cryptocurrency transactions, on April 18, 2021. At that time, the whale had received 1 million BNB from Binance in a single transaction. Since then, he had only made two small transfers of 1,000 BNB each, one in May 2021 and another in January 2022.
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One of the most prominent whales in the BNB ecosystem is the address 0x000000000000000000000000000000000000dead, which is also known as the BNB burn address. This address is where Binance, the leading cryptocurrency exchange and the creator of BNB, sends a portion of its profits every quarter to reduce the total supply of BNB and increase its scarcity.
The sell-off caused a sharp drop in the price of BNB, which fell by more than 10% in a matter of minutes. The price recovered slightly after the initial shock but remained below $300 for the rest of the day. The whale’s motive for selling his BNB is unclear, but some speculate that he might have been waiting for a peak in the market cycle to take profit. BNB had reached an all-time high of $686 on May 10th, 2021, but since then it had been fluctuating between $300 and $500.
BNB is the native token of Binance Chain and Binance Smart Chain, two blockchain platforms that support decentralized applications and smart contracts. BNB is also used to pay for fees and services on Binance, as well as to participate in various initiatives such as token sales and governance.
The whale’s exit could have a significant impact on the BNB ecosystem, as it reduces the supply and demand of the token. It could also affect the confidence and sentiment of other BNB holders, who might follow suit and sell their tokens as well. The whale’s decision to sell his BNB tokens after holding them for more than two years is puzzling, given that BNB has been one of the best-performing cryptocurrencies in the past year.
BNB has risen by more than 1,000% since June 2020, when it was trading at around $4. It reached an all-time high of $686.31 on April 12, 2021, before correcting to its current level of $48.76. However, some analysts believe that the whale’s sell-off could also create an opportunity for new investors to enter the market at a lower price. They argue that BNB still has a strong value proposition and growth potential, especially with the upcoming launch of Binance NFT, a platform for non-fungible tokens that will use BNB as its main currency.
Relatively, Binance US, the American affiliate of the world’s largest crypto exchange, has seen a significant drop in its trading volumes in recent months. According to data from CryptoCompare, spot trading volume on Binance US fell by 26% to $212 billion in June, the lowest level since November 2020. Derivatives trading volume also declined by 16.5% to $1.10 trillion, the lowest since December 2022. This trend reflects the overall decline in crypto trading activity across the industry, as well as the rising regulatory pressure on Binance in several jurisdictions.
One of the possible reasons for this decline is the increased regulatory scrutiny that Binance and its affiliates are facing in various jurisdictions. In June, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its CEO Changpeng Zhao, accusing them of operating a “web of deception” and violating U.S. securities laws. The SEC also asked a federal court to freeze Binance US’s assets and appoint a receiver to oversee its operations.
Binance US is not the only entity under fire from regulators. Binance itself has received warnings or notices from authorities in the UK, Japan, Canada, Thailand, Cayman Islands, and Singapore, among others, for offering unregisted digital assets on its platforms. The situation currently happening in the United States will determine how, what and where crypto assets can be traded within the country.