Anika Begay
A recent transaction by Binance, the world’s largest cryptocurrency exchange, has caught the attention of the Shiba Inu community. This transaction was reported to be carrying a large number of SHIB tokens, sparking speculation as to why the exchange made this transaction in the first place. However, the destination of the tokens could serve as a motive for the transaction.
Binance moves 137 billion Shiba Inu tokens
On Sunday, August 11, a noteworthy transaction involving the Shiba Inu token was observed on the Ethereum blockchain. This time, the transaction came from the Binance crypto exchange, with over 137 billion SHIB tokens transferred from one of the exchange’s wallets.
At the time of the transaction, approximately 137.65 billion tokens were transferred from the Binance 14 wallet and were worth $1.924 million. The destination of this transfer was shown to be another Binance wallet, publicly known as the Binance 16 wallet.
Now, this transaction would have been classified as a withdrawal if the Shiba Inu tokens were moved to a wallet address not associated with the Binance exchange. However, with the coins going to the Binance 16 wallet, it suggests that this is just a reshuffling of Shiba Inu coins held by the exchange.
Exchanges typically shuffle or redistribute coins across their various wallets for various reasons, such as security, liquidity, etc. Even distribution ensures that there is always liquidity for its users, as well as ensuring that holdings are adequately protected by distributing them across multiple secure wallets.
Just a drop in the ocean
While Binance’s move of 137 billion Shiba Inu tokens is significant in itself, it’s only a small dip when it comes to the cryptocurrency exchange’s Shiba Inu holdings. According to its latest Proof-of-Reserves (PoR) report, cryptocurrency exchange Binance currently holds 62.8 trillion tokens.
However, this number, while high, shows a decline from the previous month’s figure of 62.95 trillion Shiba Inu tokens. What this shows is that over 1 trillion SHIB tokens were withdrawn in the one-month period, suggesting that investors are choosing to hold onto their tokens in anticipation of higher prices. If withdrawals continue, Binance could see its reserves drop further as investors prepare for a highly anticipated bull run.
However, the Binance Proof of Reserves report shows that users’ Shiba Inu holdings are overcollateralized. At the current rate, the cryptocurrency exchange maintains a collateralization ratio of 102.57% for all SHIB tokens held on the exchange.
Featured image created with Dall.E, chart from Tradingview.com
