Possible reason for today's crypto selloff
The crypto market is going through a major selloff even while I am writing this post. Bitcoin went as low as $9.5k today and ethereum went below $180 at a point. The market has stabilized a little right now with Bitcoin back over $10k.
The selloff caused major panic leading to most other altcoins being sold. Heading over to Coin360 and you will be greeted with a sea of red.
In the past couple of weeks when the stocks market was getting increasing volatile, Bitcoin was doing rather well. In fact many has pointed out a positive correlation with physical gold. However, today's meltdown came despite a massive drop in major stock indices yesterday. Many are now asking why the sudden selloff?
China-based Ponzi Scheme
As many of us look to Crypto Twitter for answers, a potential explanation emerged. Dovey Wan from Primitive Crypto tweeted this.
According to Dovey, a Ponzi scheme named PlusToken, which had scammed investors of $3b, might be the cause of this massive crypto selling. She provided substantial evidence and a list of addresses that are linked to the Ponzi scheme operators. Alongside the addresses, Dovey has attached investigative data from security audit firm Peckshield that reveals the money flow from PlusToken’s wallet as of early July, the date the sell-offs are thought to have begun.
This to me is a very logical explanation of today's crash. If true, I believe it to be something just temporary. The story is still developing and I won't be surprised if large exchanges start to blacklist these addresses and prevent further selling.
Such Ponzi schemes have been giving crypto a bad name and now they are even causing a market panic. With Bitcoin ETFs decision coming in September and October, this isn't good news for the crypto community.
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Let's see what happens. If you have your BTC safe and sound in your wallet, why panic? I never understood that... Even if you have them in a serious exchange like Bittrex or Binance, which they can respond to attacks and thefts. Why are you going to be afraid? Is it because those BTCs are being invested in other things and other companies? 👀
For this event, it is more of BTC being dumped resulting of downward pressure on the price. Not really about whether the funds are safe or not :)
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I really didn't see that. Thanks for the clarification :)
Hi @culgin,
This is a very interesting analyzis. I believe that in the crypto world scams can have quite a big influence in prices. You might be right with this explanation.
Best regards,
Achim
Thanks for reading and leaving the comment
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Greetings appreciated @culgin.
Trust is still betrayed.
The moments of crisis that the crypto market has suffered have been preceded by scam plays that have involved a large number of investors.
After the proliferation of false ICOs, we were able to witness the fall of 2018. Today you propose this hypothesis which makes perfect sense.
Whenever cases like these occur, the negative effects caused in the mood of crypto investors are slow and costly to overcome. Undoubtedly, a massive and nervous sale like this is capable of tearing down the market.
Hopefully, measures based on these experiences will be taken to restore investor confidence.
Your friend, Juan.
Indeed. Many ICOs have failed. Some are outright scams and some simply couldn't survive the bear market
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Hi @culgin
What a big problem, this type of mischief do a lot of damage to the cryptos market.
Hopefully he recovers well I particularly think so and I'm sure it will grow.
However, due to this, more and more controls will be created to protect these operations from the Ponzi scheme.
Good idea to blacklist those addresses.
It's going to be difficult. People just need to be more educated and street smart so that they don't fall for such schemes
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Steem is at its lowest since I joined. Sometimes, I wonder whether it would amount to anything in the end. 😊
I wonder about that too. Haha.. I do think that in terms of the technology, it's getting better.
However, after so long, the utility of the coin still isn't that clear. Plus there are now many tribes tokens that are diluting the base value of STEEM. The upcoming HF21 isn't going to bring much difference
All being said, it is still a nice platform to use and this is the only place I am blogging on. I just find too much hassle to start a separate blog
I’m just getting into Steem and enjoying it! So far it’s just a nice blogging platform with a bit of a botting issue.
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Hi, welcome to Steem. Some users hate bots to the core. Others embrace them. For me, they are just tools
Anyway, your account seem to be linked to a gaming project? Care to explain what it's about?
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Understood. 😊
The market is always resilient and will come back on the good side of the force.
I hope that's the case as well :)
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Hi @culgin
Thanks for sharing your thoughts on current market conditions. Ponzie schemes in Asia are still "everyday thing".
Personally I'm glad to see that bitcoin and other alts are mostly red. I strongly believe that another bull run is not what we need right now. That would end up painful. This industry is not ready for another 2017.
ps. did you notice that chinese central banks "killed" their own currency just few days ago? In response to trade war and another set of tarrifs, they decided to bring their own currency to level from 11 years ago. I wonder what will happen next.
Upvote on the way :)
Cheers
Piotr
It's probably just the beginning. IMO, the trade war will be rather long drawn. It's going to be a long struggle and China loves to play the long game. However, devaluation of fiat currencies is always good for crypto :)
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