Bitcoin’s price abruptly nosedived more than $200 in less than 20 minutes on April 17 in the middle of a rally, fueling speculation that mass sell-offs by two bitcoin whales may have caused the sudden price plunge.
Bitcoin whales are individuals who hold large amounts of the top cryptocurrency by market cap. There are widespread rumors that some of bitcoin’s wild price swings are due to market manipulation by these whales. About 40 percent of bitcoin is reportedly owned by 1,000 individuals.
The anonymous cryptocurrency wallet held by user ID 3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r dropped by 6,500 bitcoin on Tuesday, MarketWatch noted. The value of that sell-off was about $50 million using an average bitcoin sale price of $8,146. That anonymous digital account is definitely a whale; he/she owns $1.5 billion in cryptocurrencies, according to BitInfoCharts.
That huge sell-off came one day after another anonymous wallet dumped 6,600 bitcoin at an average price of $8,026. That amounts to almost $53 million. Together, the two bitcoin whales sold more than $100 million of crypto in 24 hours.
As of this writing, the bitcoin price hovered at about $8,091, up 2.55 percent in the last 24 hours. It’s a mild spike from the day’s low of $7,880. Bitcoin had been in the middle of a rally when its price abruptly dropped yesterday.
New York Attorney General Launches Crypto Probe
Aside from the whales, another factor that may have contributed to the price slump was news that the New York Attorney General’s Office launched an “inquiry” into 13 cryptocurrency exchanges in a bid to bolster transparency and crack down on fraud.
The AG sent a questionnaire asking the exchanges for information “on their operations, internal controls, and safeguards to protect customer assets.” Attorney General Eric Schneiderman sent letters to the Winklevoss twins’ Gemini Trust, Coinbase, and Binance, among others.
Here’s the complete list:
- Coinbase Inc. (GDAX)
- Gemini Trust Co.
- BitFlyer USA Inc.
- iFinex Inc. (Bitfinex)
- Bitstamp USA
- Payward Inc. (Kraken)
- Bittrex Inc.
- Circle Internet Financial Limited (Poloniex LLC)
- Binance Limited
- Elite Way Developments LLP (Tidex.com)
- Gate Technology Incorporated (Gate.io)
- itBit Trust Company
- Huobi Global Limited (Huobi.Pro).
The cryptocurrency exchanges have until May 1 to return the completed questionnaires.
“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money,” said NY Attorney General Eric Schneiderman. “Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms.”
Schneiderman said the inquiry was necessary in light of the “theft of vast sums of virtual currency from customer accounts, sudden and poorly explained trading outages, possible market manipulation, and difficulties when withdrawing funds from accounts.”