As another year comes to an end and Christmas approaches again, what was table talk a year ago may still be the dominant topic of conversation this year as well. However, last year’s jubilance may transition into disappointment this year.
We are talking about Bitcoin, the world’s first cryptocurrency. Through the second half of 2017, cryptocurrencies had soared in value, with Bitcoin reaching to almost USD 20,000 from the levels of USD 1,000. Buyers were excited; it led to frenzied buying which heated the prices of Bitcoin further, and it hit a peak previously unseen in any commodity or investment.
Crypto exchanges like Coinbase were swamped. Thousands of new accounts were opened during the last few months of 2017. Speculators bid prices to new highs every day. Thus, the prices of Bitcoin were purely dependent on speculative frenzy.
By the end of 2017, the Denmark-based Saxo Bank had predicted that Bitcoin would again fall to the price range of USD 1,000 in 2018. Come 2018, and with the year almost ready for a wrap-up, the once outright crazy prediction of Saxo Bank may just come true.
The fact is that the hype about Bitcoin has played into the hands of big money players. These ‘crypto whales’ as we call them have cashed in massive profits. They buy back at lower prices.
Could these crypto whales be manipulating the markets right now? As owners of a large percentage of Bitcoins, they for sure have the requisite influence to force the prices down to accumulate the cryptocurrency at new lows.
The interesting thing is panic sellers toe the line; that is, when crypto whales sell, they do the same. It results in lowering the prices of Bitcoin, which gives the crypto whales the opportunity to acquire more Bitcoin at lower prices. And, thus continues the cycle. This classic manipulation of an asset that was developed with the primary motive of being free of any control is a paradox in itself.