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Bitcoin Whales May Be Stabilizing Crypto Market: Study


A study by a cryptocurrency market watchdog shows that bitcoin's largest holders are a diverse group that may be stabilizing, rather than destabilizing the market.

The results of an analysis of bitcoin's 32 largest wallets by analytics firm Chainalysis, comes in the wake of rumors that a $2 billion whale, or out-sized bitcoin holder, was suspected of single-handedly setting off a 15 percent plunge in bitcoin's value by selling more than 50,000 coins in a month.

The abrupt drop in value made bitcoin investors of all sizes wary of a market that might be dominated by a few giant players, who could undermine pricing at any moment.

Bitcoin has lost two-thirds of its value from its peak of $19,500 in December last year and is generally remaining bearish as investors adopt a more cautious approach.

Some crypto pundits predict that they don't see a major comeback for the most popular cryptocurrency in the rest of this year.

Chainalysis says data demonstrates that Bitcoin whales, despite having the capability of executing transactions large enough to move the market, appear to have stabilized it during recent price declines, rather than exacerbating price movements.

These trading whales are professionals with no vested interest in abruptly tanking the market, and for liquidity, they are likely to use OTC trading platforms equipped to manage large transactions with minimal market disruption, according to Chainalysis.

The 32 largest bitcoin wallets represent about 1 million bitcoins, worth about $6.3 billion. And only about a third of them are actively engaged in bitcoin trade.

The data suggest that during the major price declines of December 2017 and most of 2018, trading whales were actually net purchasers of bitcoin from exchanges. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market.

The research suggests that while Bitcoin whales may be big and somewhat mysterious, they have less of an impact on market prices than what is widely believed.

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