Market Jittery as $1 Billion Worth of Bitcoin Rumored to Be Dumped

The cryptosphere is agog with rumors about a bitcoin whale – someone controlling a significant amount of bitcoin – preparing to dump approximately $1 billion worth of bitcoin on the market. If it happens, such a move would almost certainly have a devastating effect on the price of bitcoin and other crypto assets in a market whose total capitalization is still below $300 billion. Two major theories are making their way around the identity of this mysterious bitcoin whale who is threatening the industry.

Possible Silk Road Scenario

According to speculative internet chatter, the wallet is owned by Silk Road, the infamous darknet website that operated from 2011 until the FBI shut it down in 2013. Unlike Silk Road 2.0, launched by Ross Ulbricht who was later caught and sentenced to life imprisonment, the identity of the people behind Silk Road and the funds generated from its activities have largely remained secret.

Silk Road’s launch in 2011 closely coincides with when bitcoin first achieved a measure of real popularity, and so the theory is that Silk Road facilitated dozens of illegal transactions using bitcoin stored in a cold wallet, perhaps anticipating that its value would rise someday. Given that bitcoin traded between $1 and $31 in 2011, it is entirely plausible that Silk Road’s original wallet holding 111,114.62 BTC – currently worth $844 million – is the billion dollar culprit behind investors’ bitcoin dump fears.

According to information posted on Reddit, the entity controlling the wallet in question has spent the past three days by moving the BTC funds, dividing them into 100-coin blocks via sub wallets. The poster claims that a total of 60,000 BTC has been transferred in this manner, linking to a bitcoin blockchain information resource.

(Source: Blocktrail)

The final argument supporting the Silk Road hypothesis is that the wallet was last active on March 9, 2014, which was just a few months after the FBI shut down Silk Road. A bitcointalk conversation is even proof to some that Silk Road is the whale that threatens to destabilize the entire crypto market.

Mt. Gox Hypothesis

Other users have an altogether less dramatic explanation for the event. Going back to 2011, the one-time largest crypto exchange on earth, Mt. Gox suffered a catastrophic hack that saw it lose more than $473 million worth of bitcoin at 2011 prices. Since that time, Mt Gox creditors have successfully mounted an action that saw the company’s liquidation process changed from bankruptcy proceedings to civil arbitration.

This has opened up the possibility of retrieving their money in bitcoin at levels worth vastly more than 2011. Thus proponents of the Mt. Gox theory believe that the whale is indeed Mt. Gox trustee Nobuaki Kobayashi, who recently announced the commencement of a claims settlement process that will see the defunct exchange’s creditors receive their money in bitcoin and bitcoin cash.

To this end according to the theory, Kobayashi is preparing to liquidate a substantial sum of Mt. Gox’s bitcoin and bitcoin cash assets. The crypto movements causing panic have indeed been in bitcoin and bitcoin cash, which would appear to support this theory. What is more Mt. Gox has actually done something like this before, with a similar effect on market confidence.

For now, the cryptosphere can only wait with bated breath to see what impact the actions of this mysterious whale – whoever they are – will be on the crypto market.

Source link

Spread the love

Related posts

2 Thoughts to “Market Jittery as $1 Billion Worth of Bitcoin Rumored to Be Dumped”

  1. This information is priceless. How can I find out more?

  2. It’s nearly impossible to find experienced people for this topic, however, you sound like you know what you’re talking about!
    Thanks

Leave a Comment