Can you guess how much bitcoin "whales" own? Roughly 1/3 or $37.5 bn worth.
Image source: currexcy.com
Everyone's heard of bitcoin whales and the fact the they manipulate markets. However unless we know what they own, or who they are, it's difficult to say whether markets are manipulated, and if yes, to what extent.
In that context i came across a very interesting article on Financial Times, that sheds some light on this subject. I will share some interesting points from that article below.
About 1,600 investors collectively hold $37.5bn of bitcoin, or close to 33% of the total, implying heavy concentration of wealth.
Data was provided by Chainalysis, a blockchain research company. The 1,600 bitcoin wallets had at least 1,000 bitcoin each.
These do not include bitcoin deemed lost or unused for years.
Just under 100 wallets contained between 10,000 and 100,000 bitcoin.
FT was also of the opinion that "the fact that the bitcoin market is so tightly held stands at odds with bitcoin’s mission to democratise finance by setting up an alternative monetary system free of central bank control and open to all. It also brings risks for smaller speculators." This is utter BS from FT because they fail to understand that real decentralisation comes from decentralised mining, limited supply and data that cannot be changed. There is no one authority that can change anything. Concentration of wealth does not destroy bitcoin's idea and achievement.
Last November, the amount of bitcoin owned by those who held the asset for more than a year was roughly three times that held by short-term investors who traded more recently.
However, by April 2018, the data showed the amount held by long-term investors, was much closer to matching the amount held by short-term speculators.
Experts also warn there are opportunities particularly for larger players to engage in market manipulation owing to the lack of regulation and the existence of informal over-the-counter markets.
“A number of these larger holders do communicate with each other, they know [each other], they take stock of market activity,” said Dr Garrick Hileman, head of research at Blockchain and co-founder of Mosaic.io, a platform for market intelligence on crypto.
The last two point stood out most for me and made the story worth sharing with you guys here on steemit. There is possible collusion and manipulation in the markets and regulation should help address it.
Hope you find this interesting. If you do pleaae upvote and resteem.
@karamyog great research, thanks for pointing out the large amount of bitcoin these whales hold. No one wants feel like their investments can be put in jeaporday for the benefit of a small majority whose power out weighs the larger minority.
Its the sad outcome of when money meets opportunity. People with money seek out opportinity creating these imbalances, its a natural progression of most innovative ideas. Lets hope this doesnt hold down the smaller investor from taking advantage of the opportunity bitcoin presents. Small investors need more patience, patience, and more patience.
I agree with you fully.
Firstly i must acknowledge that i have merely shared the research but hats off to those providing these insights. I dont necessarily think the guys who own large amount of bitcoin are totally wrong. These guys were ready to dive into this innovation way before we did, they should have some benefit of taking the risk early on and for their insight. Collusion and manipulation is totally wrong. If these guys collude to negatively impact the minority then some checks should be put in place to have some sort of balance and there i fully agree with you. I also agree that small guys need to be patient. Once demand for this asset goes up, manipulation will be difficult as large volume buyers will be able to support prices. Vol should also come down and 25% of bitcoin is yet to be mined. So yeah, i cant disagree. Paitence is the key here.