The total crypto market capitalization has lost a massive $38 Billion since last week Wednesday, the 5th of September. Back then, the crypto community was gearing up for a resurgence of Bitcoin to levels of above $7,500 as the total crypto market capitalization stood at $239 Billion. The same market is now worth $201 Billion signifying a drop of 19% in a week. BTC is currently valued at $6,412 and down 10.15% in the last 24 hours.
A concrete explanation of the current market decline has not be pin pointed with many suggesting it was an overreaction to the Goldman Sachs firm, withdrawing their intentions to launching a crypto trading desk in the near future.
Anthony Pompliano, Founder and Partner at Morgan Creek Digital, tweeted the following with regards to the recent crash in the markets.
Want to know why there isn’t a crypto ETF approved yet?
We just saw $100 million of Bitcoin dumped on the market in less than 10 minutes. It caused more than a 5% decline in BTC price.
Some argue volatility, others argue manipulation. The truth is no one knows.
Could It Be The Last Of The BTC Whales Cashing Out?
The crypto community is well aware of the existence of Bitcoin whales who still have some BTC to dispose off in the markets. This theory goes on to postulate that they were the early investors of BTC and are liquidating to move to traditional investment options such as real estate as they retire.
Whales are the big players, where the ocean is a metaphor for the cryptocurrency ecosystem. While they currently have the potential to impact investments, over the long term and as the crypto market matures, I believe their ability to impact the market will dwindle.
Using the factor of time as a foundation for this argument, the influence of BTC whales in the crypto markets is dwindling as each liquidates their holdings during periods of a strong BTC. History has proven that every time BTC pumps, there is a massive dump of large amounts of crypto that follows. As this continues, fewer and fewer individuals or organizations will have the power to dump a huge volume of BTC in the markets at one go as was postulated by Anthony Pompliano. This means that it might get a bit chaotic before it gets better in the crypto markets. In the long run and once it is all over, it will bring about the stability everyone has been yearning for since the market started declining back in February.
[Image courtesy of news.bitcoin.com]