Bitcoin has become a must in recent weeks. It has been boiling for some time now, in terms of mass appeal and understanding, but its recent wave of adoption has caused it to gush in the main street.
However, despite the influx of individuals, Bitcoin's core users, holders and influencers remain a small, tight-knit community. Early adopters, technology fanatics and daring entrepreneurs of a few years ago hold most of the power.
These are the whales of the Bitcoin Pond, and according to Bloomberg, as few as 1,000 people can own 40 p. 100 of all existing Bitcoin.
In this regard, what control do these 1,000 people have on the market? Either on purpose or not. And if they cash simultaneously? And now, what about new whales joining the pond via futures?
The latest decline, which occurred after a monster rally for Bitcoin towards $ 19,000 saw the digital currency cool to a more reasonable level of $ 14,000. That represented a drop of 15% – nothing normal for Bitcoin – but the catalyst for this fall was attributed to inventory and cashing for big profits.
This form of minor market manipulation shows how anything with a few thousand coins can actively move the market if they make a big buy / sell. Moreover, this manipulation is part of the process and is not exactly a coordinated front. But if there was one?
A Tactical Shot
Many people, of course, fear hollows and 'crashes'. that happen almost like a clock with Bitcoin. The market is volatile, but also predictable in this fact.
There are those who welcome a dip however, seeing it as a discount sale on a bit more bitcoins. Thus, a strike coordinated by a large number of whales, selling enough parts to cause a flood on the market, could lead to manipulation to bring down the price.
"I think there are a few hundred guys," says Kyle Samani, managing partner of Multicoin Capital. "They can all probably call each other, and they've probably done it."
The case of & # 39; Spoofy & # 39; in August, was an occurrence of this – apparently. Rumors ran about a trader with almost unlimited funds who manipulated the Bitcoin markets.
Although there was no evidence of a co-ordinated strike at the Bitcoin price of these whales until now
Future Trading's arrivals through CME and CBOE have allowed another breed of Bitcoin investors to enter the market, a type that may eclipse many of the current. Bitcoin whales.
These Wall Street types can now be part of the wild Bitcoin race, but can they handle it too?
The manipulation that would be seen by future traders is also different because, for the first time, there is a reason to be a shark; a killer whale;
With Future Trading, there is protection against a sharp drop in prices, and inadvertently an opportunity to profit as much from a decline as from a rise. This means that there is an incentive, for those who can, to manipulate the relatively small Bitcoin market with a lot of money.
This manipulation will also be pointing down, which means that there could be a wild ride.