Did Chinese Ponzi Scam Cause Bitcoin To Tank 10%?
For the umpteenth time Bitcoin has dumped double digits in a single day … again. Yet the FUD and panic still pervades the scene like a bleak cloud of despair that will be blown away and forgotten within a week.
A Fourth Dip to Four Figures
Since the big rally begun in early April, Bitcoin has fallen back into four figures four times already. Today’s purge, which bottomed out at just below $9,500 according to Tradingview.com, has already seen the asset start to show signs of recovery.
At the time of writing BTC had made it back over $9,900 and was eyeing a return to five figures already. All of this has happened within the space of a few hours so it is a little strange that the panic and fear returns every time Bitcoin makes a big move to the downside.
As pointed out by co-founder & CEO of Ciphrex, Eric Lombrozo, people are already looking for explanations.
“Bitcoin price dips for the gazillionth time, prompting wild reports of the end of the world and causing pundits to invent explanations. Predictions: In a week, nobody will remember this dip anymore. In a month the same thing will happen again and people will panic again.”
Bitcoin price dips for the gazillionth time, prompting wild reports of the end of the world and causing pundits to invent explanations.
Predictions: In a week, nobody will remember this dip anymore. In a month the same thing will happen again and people will panic again.
— Eric Lombrozo (@eric_lombrozo) August 15, 2019
Chinese Ponzi Scam Responsible?
One possible factor floating around the crypto sphere this morning is a Chinese Ponzi scam that resulted in the loss of a substantial sum of Bitcoin. Founding partner at Primitive Crypto, Dovey Wan, has been busy on twitter today with news that PLUS Token team members have been arrested.
The likelihood of this having any impact on wider Bitcoin and crypto markets is still being debated. The story is not even being reported outside of China at the moment and Wan appears to be the only source of information aside from a from a six week old SCMP story.
Founding partner at Adamant Capital, Tuur Demeester, has hinted that the sums involved could have wider implications on markets;
“If true, we’re talking about a 200,000 BTC heist here… +1% of circulating supply, worth over $2 billion today.”
If true, we're talking about a 200,000 BTC heist here… +1% of circulating supply, worth over $2 billion today. https://t.co/Kdd4LJ7QwZ
— Tuur Demeester (@TuurDemeester) August 14, 2019
Cryptocurrency thought leader, Richard Heart, added that the Ponzi angle seems plausible. While senior market analyst at brokerage eToro, Mati Greenspan, said that many are looking for reasons for the recent price action;
“Many analysts have been doing their best to tie in the latest moves in the crypto market to the uncertainty in geopolitics but it’s difficult to say exactly how much connection there really is.”
Bitcoin appears to be doing what Bitcoin does. Whatever the cause, these movements have been witnessed countless times before and will happen countless times again so the panic is totally unwarranted. It is all just another day on crypto markets.
Image from Shutterstock
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Martin Young, Khareem Sudlow
