The number of investors owning 1,000 BTC is increasing. Despite the decline in the price of the cryptocurrency, bitcoin continues to flow on Grayscale.
The number of investors owning 1,000 BTC is increasing. Despite the decline in the price of the cryptocurrency, bitcoin continues to flow on Grayscale.
These days, institutional investors and the richest are increasing their Bitcoin profits by taking advantage of retail users’ fear. The big holders continue to accumulate coins even with a decrease in the price, concludes CoinMetrics in its latest newsletter on the State of the Network.
In a report that saw the light on January 26, the cryptocurrency market data provider analyzes how fear, uncertainty, and doubt (FUD) would influence the fall in the bitcoin price that happened last week. At that time, the cryptocurrency fell 17% from USD 40,000 to $ 31,400 per unit.
The crypto asset collapse went in parallel with disseminating various information that created confusion among users and generated fear. “Some holders got afraid and sold their shares,” says the report. User hysteria exploded on January 20 when diverse media spread a false story about a double-spend in bitcoin.
Several insiders of the ecosystem spoke to the public to enlighten the matter and make things clear, but the fear expanded too fast, and the price of the cryptocurrency decayed.
Later, stories about the transition of command in the presidency of the United States began to circulate. Among the stories, the incoming Treasury Department Secretary Janet Yellen stated that cryptocurrencies’ use was primarily for illicit purposes and that it would be essential to crack down on illegal use cases. “The claim is not only false but also out of context,” the report adds.
Yellen had said that she believes that there is a careful study of how to encourage the use [of cryptocurrencies] for legitimate activities while restricting their use for malicious and illegal activities.
Bitcoin Whales and How they Get Stronger Through Fear
Analysts at the data provider firm believe that the FUD was not the only factor influencing the bitcoin price drop last week. They did find enough elements to assure that the biggest holders of bitcoin (whales) may be taking advantage of the subsequent fear that spread in the market. These whales are using fear as an advantage to accumulate more coins.
The data shows that, despite the price drop, the number of addresses that have at least 1,000 BTC (more than USD 30 million) increased by 11%, from an approximate record of 2,200 addresses to a total of 2,443. The figure indicates that the number of large BTC holders continued to rise as retailers shed their positions.
Well-known analyst Willy Woo also referred to the increase in the number of addresses that own more bitcoin. He thinks that there is a need to redefine the terms that became popular when classifying hodlers.
He said through a joke that the ecosystem needs the collaboration of marine biologists to learn about the different types of “shrimp” (whales prey) that would allow addresses with less than 1 BTC to be classified. From his perspective, this action will serve its purpose once the cryptocurrency price returns to its bullish boom, as he believes it will.
By: Jenson Nuñez
