Cryptocurrency market update: The theory of a $2 billion Bitcoin whale that sent the market on a deadly tailspin
|- The 111,114 Bitcoins would have been $2 billion at the time the BTC/USD exchanged at its all-time high.
- The wallet moved 50,500BTC between August 23 and August 30.
Last week, Bitcoin led the market is an unexpected tumble where it declines 15 percent in a couple of days. As reported by FXStreet then, the cryptocurrency community started to point fingers as speculations mounted trying to demystify the reason behind the fall.
Furthermore, reported on Bloomberg on Thursday a theory has come out blaming the owner (a whale) of an electronic wallet. The wallet is not a recent one, in fact, it was registered in 2011. However, it is believed to have been the spark that ignited the widespread selloff after moving at least 111,114 BTC. These Bitcoins would have been $2 billion at the time the BTC/USD exchanged at its all-time high. The whale is likely to have been cashing out following the recent slump that saw Bitcoin descend to lows near $5,800.
In the article published last week, I explored chances that the fallen Mt.Gox exchange was behind the crash. Other speculations pointed towards Dread Pirate Roberts.
However, a research released by Chainanalysis Inc., a tracking tool that is used to give firms and law enforcement data indicated the above wallet moved 50,500BTC between August 23 and August 30. Unfortunately, it could not be confirmed if the coins made it to exchanges.
“This is actually really interesting because of the Reddit detective work that’s been happening and just people making these assumptions that this whale is cashing out. It leads to conspiracy theories that someone’s trying to sabotage Bitcoin -- just from someone doing an administrative move of their funds for security purposes, or we don’t even know why they have done it,” said Kim Grauer, one of the senior analysts at Chainanalysis.
The tool is used to track money laundering activities. The detective work is carried out by revealing the connection between blockchain addresses.
Bitcoin is trading at $6,450 at the time of press. The digital asset recovered from the lows marginally above $6,100 forming a support at $6,200 before spiking to $6.582 (Friday highs). Cryptos have corrected lower on the day but buyers are battling to prevent further declines.
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