The amount of Bitcoin that is controlled by the top Wallets, has increased since 2017. This could have serious consequences for the further development of the market.
Within the crypto currency industry, you often hear the complaint that the market will be controlled by “whales”. Unfortunately, this Problem seems to have any reliable metric that only made it worse.
Market fluctuations are becoming more likely
Bloomberg reported that investors keep up with the 1,000 to 1 million Bitcoins now 42.1 per cent of the total supply. This represents an increase of 37.9 percent at the peak of the speculative bubble in the year 2017.
The increasing concentration of Bitcoin ownership leads to the fact that market fluctuations are more likely. “Flipside Crypto” notes that only about 3.5 percent of all addresses are weekly traded actively. According to the Texas Finance Professor John Griffin and this will have serious consequences for the market.
Some speculations suggest that some of these top accounts, only to custodian banks and stock exchanges. Coinbase holds around 966.230 Bitcoin ($7 billion) in its Cold Wallets. Nevertheless, the Exchange, which controls an increasing number of circulating BTCs gives cause for concern. The Situation further highlights the centralization of crypto-Assets between a few stock exchanges, whales, and other Places.
The consequences of this Bitcoin-consolidation in a few Wallets were already on the market. In 2019, for example, has led to a remarkable volatility.
At the end of October, Bitcoin recorded a remarkable increase of 7,500 $ to almost 10,000 $ in just a few days. The gains are quickly dissipated and, in November, completely de-energized. Bitcoin is currently traded at 7,250 thanks to$.
These chaotic movements may indicate price manipulation by companies that hold increasingly more and more Bitcoin. The indicators point to increased volatility, as the whales retain their control over the market.
Since 2017 is the main argument for Bitcoin is that it is a store of Value. Since the markets are at the mercy of the growing consolidation of BTC in only a few Wallets, could Bitcoin be the global Standard will be unusable if this continues.