Bitcoin Market Nightmares: Whales And Hodlers To Blame

This, and what pundits believe to be large-scale price manipulation moves, is blamed for the huge uptick that occurred between the months of August 2017 and February 2018, and the subsequent market slowdown.

Right now, many analysts, including Phillip Nunn, CEO at Wealth Chain Capital, have affirmed that the recent steep market plunge is a result of large-scale price suppression by experienced futures traders and whales. It is believed that some experienced traders and companies profited greatly from the recent price slide after shorting bitcoin futures.

The Risk of Having Institutional Players at This Stage

The fact that there has been a sharp increase in whales in the bitcoin market in recent months is a worrying predicament and a risk unto itself. Especially now that there is little hope of positive price triggers in the near future, such as a bitcoin ETF (Exchange Traded Funds) approval.

The whales pose a risk to smaller investors because they already possess the resources to manipulate markets. Some have already pumped tens of millions of dollars into the sector and are not prepared to face a recusal. As such, the market should brace itself for waves of sophisticated market manipulation schemes.

It is estimated that only a few hundred people hold about 40 percent of bitcoin and that these people probably know each other and communicate on a regular basis. This means that bitcoin is not as decentralized as it’s been made out to be. In addition, market regulation is still a major challenge and leaves the industry open to exploitation.

Its Use as a Medium of Exchange Greatly Affects Bitcoin’s Value

Bitcoin’s is experiencing a decline as a medium of exchange in commerce. According to a research report published by Bloomberg in August, bitcoin mercantile volumes were down to $60 million from a peak of $411 million in September last year. The news network obtained this data from 17 major crypto merchant-processing services. According to the analysis, customers currently appear to avoid using the cryptocurrency for transactions.

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