Sliding 12% - Still Buying? Uniswap Sees Large Trades, ETH Price Approaches $450
According to Uniswap trading records, several large abnormal ETH transactions surged into the platform yesterday (10th), causing the ETH price on Uniswap to have a premium of over 12.5% compared to the ETH price on other exchanges during the same period. With such a severe slippage, what could be the motivation behind the transactions initiated by this address?
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$18 Million USD Influx for Purchases
Eric Conner, the founder of Ethhub, pointed out on Twitter this morning that on the decentralized exchange Uniswap, an address initiated multiple large ETH purchase transactions.
Welp, someone just bought $15mn worth of ETH via Uniswap. pic.twitter.com/FXcuSYYrjf
— eric.eth (@econoar) August 10, 2020
Subsequently, from the on-chain transaction records of the address, it can be seen that within the past 14 hours, the address has spent a total of $18 million USDT to purchase over 40,000 ETH. Multiple large transactions flooded into the Uniswap exchange within a short period of time, causing the price of ETH on the platform to decouple from prices in other markets, reaching a high of nearly $450, with a premium of over 12.5% compared to the ETH price on Binance during the same period. It is estimated that under such severe premium conditions, the owner of the address may have incurred losses close to $2 million due to slippage after completing a series of trades.
Motivation Behind the Abnormal Trades
Under normal circumstances, a rational trader would not choose to accumulate ETH holdings in this manner, as purchasing ETH on decentralized exchanges like Uniswap can significantly increase the cost of acquiring ETH due to severe slippage.
There are two main possible reasons for these trades:
The first is that "these trades are part of DeFi arbitrage operations that we are not familiar with," while the other is that "the address owner is unwilling to trade in a KYC environment." However, at present, the likelihood of these trades being part of DeFi arbitrage operations seems low.
Furthermore, through on-chain data tracing the source of the $18 million USDT, it was found that two upstream transactions of $13 million USDT and $5 million USDT both came from addresses related to the Huobi exchange.
