Those who have been into crypto trading for some time must already be familiar with the constant fluctuation in token prices. The price variation of Bitcoin in the last three months alone is a virtual roller coaster; the price was $8k in November, 20k in December (19898.8$ to be more accurate) but then back to $9k in January. Such level of risk has generated a universal mantra in the community: “Don’t invest more than you can afford to lose”.
However, since the crypto market is still a growing niche, with a constant number of new adopters every day, it is still difficult to make predictions although for now, the future looks promising. It is precisely this accelerated growth that has made it possible for so many people to make a profit uncomparable with any other investment. Some early adopters have even become millionaires without doing absolutely nothing more than waiting (or HODL).
These people who for one reason or another have large amounts of money (or some token as the case may be) are known as “whales” and have the power to manipulate the market. Have you ever tried to buy a token and come across a “wall” that prevents you from buying it at a reasonable price because someone has placed an enormous purchase order for a price lower than yours?… Did you see the order magically vanishing shortly afterward? This is known as a buy/sell wall. Equally, the actions taken by these whales affect traders globally, since when they sell or buy orders as a result of their massive operations, prices can skyrocket or plummet in a matter of minutes.
In February someone bought almost 400 Million in Bitcoin, generating an increase of nearly 50% in its overall price. His operations stored on an address which today has more than 92000 Bitcoins, had a positive result for the WHOLE market, thanks to a rebound in the price trend.
On March 6, 2018, the Bitcoin reached a historic low, touching the $6000 mark. No one knew the apparent reason, but with the publication of an official report by Mr. Nobuaki Kobayashi, Bankruptcy Trustee of the now-defunct Mt. Gox, clear explanation arose for those who could make the figures:
“Between the 9th creditors’ (September 27, 2017) meeting and this creditors’ meeting (On March 7, 2018), with the permission of the court, I sold a certain amount of BTC and bitcoin cash (“BCC”) that belonged to the bankruptcy estate. The quantities sold and the amount paid into the bankrupt trustee’s account are shown below”
|Type of cryptocurrencies||Quantity sold||Amount paid in the bankrupt trustee’s account|
|Total amount paid||JPY 42,988,044,343|
These operations totaled approximately U. S. 402,797975 million dollars according to the Google Exchange Rate of 1 Japanese yen = 0.00937 U.S. dollars
The report concludes with a few words that explain the speculative behavior of every trader and the influence that a whale can have on the markets.
“I made efforts to sell BTC and BCC at as high a price as possible in light of the market price of BTC and BCC at the time of the sale.”
A Reddit user was able to track the movements made with the conclusion that the selling was not “gradual” but very quick instead. This led to an abrupt drop in Bitcoin prices that were reflected in a bearish trend for most of the other altcoins. Twitter user Matt Odell correlated the movements with bitcoin behavior. Results speak for themselves.
However, we have to wait. The crypto trading system must be taken very objectively in order not to make hasty decisions. Weak-handers usually lose, this is something to take into consideration after identifying three critical points of Mr. Nobuaki’s report:
1) Nobuaki Kobayashi’s power of decision and resource management
“Unless the court makes a new decision, the bankruptcy proceedings will proceed as before, and I, as the bankruptcy trustee, continue to have the right to administer and dispose of the bankruptcy estate as before.”
2) The number of resources he manages. If with 35000 BTC an adverse reaction was generated, it is essential to be aware that he has the resources to do it again, producing more significant results.
“The amount of BTC managed by the bankruptcy estate as of March 5, 2018, is 166,344.35827254 BTC… The amount of BCC managed by the bankruptcy estate as of March 5, 2018, is 168,177.35927254 BCC.”
3) The expressed willingness to do so again when deemed appropriate
“I plan to consult with the court and determine further sale of BTC and BCC.”
So far there has not been an official statement from Mr. Nobuaki Kobayashi or the courts of law, but social networks have been on fire since the information came out. Mainly because there is a conflict of interest between the users of the platform and Kobayashi as Mt.Gox representative since the number of bitcoins and altcoins that the users deposited in the exchange house have revalued a lot after Mt.Gox initiated the bankruptcy legal proceeding. Therefore, they expect to be reimbursed for their investment in cryptocurrency and not in FIAT money as Mr. Nobuaki’s strategy seems to pretend.
Featured Image: Twitter