The possibility of price maneuvers related to the sale of a large number of bitcoins will increase amid rising prices.
While digital currency is becoming more popular and is moving towards universal adoption, small investors should pay attention to the fact that a large number of bitcoins have a very limited number of people.
According to Bloomberg, the owners of 40% of the total number of bitcoins, which currently stands at 16.7 million coins is only about a thousand people. This means that each of them can be stored for more than 6 700 bitcoins, which at current value would be equivalent to a staggering $ 110 million dollars per person. Price continues to set new records, and there is a high probability that some owners will want to cash out the currency and take profits. Also, it is likely that the cryptocurrency its value was equal to only a small fraction of the current, and this is another argument for sale.
Whales drift to ruin?
Bitcoin was designed and created in small close-knit community technoguru and entrepreneurs. Satoshi Nakamoto remains anonymous, which makes it even more interesting group of people who control a significant part of the process that joined when BTC was worth a few dollars.
Perhaps these bitcoin whales know each other. They can even coordinate trading strategy to maximize profits. When Roger Faith asked if whales bitcoin to work together in this direction, he gave the following response to Bloomberg:
“I think it’s possible. People are free to do anything with their own money. But personally I have never had the time for it.”
To fears of manipulation
Since bitcoin is a currency, not a security, there is no legislation prohibiting trading in as a group to manipulate prices in the market. In fact, this is already happening to Althingi when groups choose currency, which is much talk in social networks, for example, on Reddit, groups on Facebook, and exchange opinions in the chat. The result is a scheme of pumping and dumping, artificial jump in prices, which forces everyone to invest for fear of “syndrome of lost profits” (FOMO), and subsequent bulk sale, when the asset price returns to its previous level.
Similar situation with the property and cryptocurrency Ethereum, which the Creator Vitalik Buterin reportedly holds about 525 000 ETH, the current market value of which is $ 240 million. Alex Sunnarborg, co-founder of the cryptocurrency hedge Fund Tetras Capital, says that the first 100 bitcoin addresses control of 17.3% of all issued currency, and the first 100 addresses Ethereum — 40% of the total.
However, the market superiority of the minority of whales. In the banking sector, the events unfolded in such a scenario for decades, and a large lump grew rich at the expense of the minority. With cryptocurrencies, however, such a scenario is unlikely, as the founders and major owners have ideological orientations. In theory, this should prevent them conduct market manipulation for their own benefit.