Bitcoin whales use high price fluctuations to accumulate even more wealth, representatives of the Bamboo Club believe.
Last year, Bitcoin had a phenomenal growth in value, reaching a record level of $19,600 in mid-December. But then the price started to show a drop, and in a few weeks it dropped to a minimum of $5,900, losing about 65% of its value in a short period.
Behind each such collapse are certain personalities from the number of cryptocurrency traders, and the “richest Bitcoin owners” usually get even more BTC, fully using such huge price fluctuations.
Features of market fluctuations
Cryptocurrency investors are well aware of the price fluctuations of digital currencies, and over the years, many traders have been able to take advantage of these features of the crypto market. In fact, if a trader can guess the top of the growth, and at this time sell their Bitcoins, then waiting for the decline in value, he will be able to purchase much more coins. According to data collected from Bitinfocharts.com. there is a special group of BTC owners who stand behind the market collapses and used these fluctuations to increase wealth. Studies have shown that most of the 100 richest BTC addresses have not lost money as a result of the last 65% drop. In fact, their stocks of BTC has increased exponentially.
Analyzing the movement of Bitcoins on one of the addresses, which now stores more than 167,000 BTC, they found an interesting pattern. The first funds on the wallet appeared about two years ago, when the address received a Deposit of about $840 in BTC. Currently, the wallet contains coins for $ 1.4 billion by coincidence, this bitcoin whale received much more BTC during each of the six “main” falls in value, when the cryptocurrency lost more than 30% of its price.
Many of the addresses of major Bitcoin holders, apart from wallets that have been inactive for years, show the same picture. These bitcoin whales were able to accumulate more BTC because of capturing highs and lows at the right time. Analysis of 100 addresses of the richest holders shows that many of them sold thousands of BTC from November to December 2017. On Twitter on November 12, 2017, it was reported that when cryptocurrencies reached new price highs, the Bitfinex exchange was put up for sale 25,000 BTC.
So how many whales are running the market?
The number of major bitcoin Holders has been a controversial issue for the last period of time. Many mass media wrote that 1000 addresses own more than 40% of the market.
However, these assumptions may not reflect the real picture. According to the data collected by Bamboo Club, many analysis models comparing the owner, wallet and address in the proportion of 1 : 1 : 1 have a fundamentally wrong approach, since it is likely that one person has a lot of wallets for Bitcoins and a lot of addresses. So the ratio can be 1: Many: many.
According to the research of Bamboo Club, incorrect methods of analysis led to the fact that the owners of 15 BTC already fall into the category of 1000 large holders, which is fundamentally wrong.
And at this time, the true bitcoin whales continue to accumulate their wealth. Increasingly, it is believed that the whales keep in touch with each other, periodically leading the BTC market to huge speculative fluctuations.
Kyle Samani, managing partner at Multicoin Capital, believes this theory is absolutely correct and argues:
“I think there are a few hundred guys — they’re all probably calling each other and they’re probably making a profit.”
There is as yet no credible evidence whether the whales work together to collapse the price, or is it the result of speculation by ordinary traders, but it can be traced that over the years of various market fluctuations, and especially during the last market downturn by almost 70%, many of them have become owners of a much larger number of Bitcoins.