Unexpected Factor That Suppressed Bitcoin Bulls in 2019 Is Now Gone
If you’ve been involved in the Bitcoin market over the past year, you know of PlusToken.
PlusToken was a Ponzi scheme with a focus on the Asian cryptocurrency space that was active in 2019. In offering depositors of Bitcoin, Ethereum, EOS and other cryptocurrencies high levels of interest, the operators of the scam managed to garner billions worth of assets. Per some reports, the scam held upwards of $3 billion worth of largely BTC and ETH at its peak.
Related Reading: Crypto Tidbits: Ethereum Surges 20%, US Banks Can Hold Bitcoin, DeFi Still in Vogue
Eventually, the pyramid collapsed; in around July of 2019, the operators of the scam began restricting withdrawals, then began to run from the authorities.
Some ringleaders escaped; others were caught by authorities.
Regardless, from July to as late as early this year, the remaining operators of PlusToken dumped millions of dollars of Bitcoin on the market.
Analysis by the pseudonymous on-chain analyst “Ergo” argued that there was around 1,000 BTC — then worth around $8,000,000 — sold every day by the scammers.
Reports from chain analysis companies suggest that PlusToken is largely what caused the crash to $6,400. Some argue that PlusToken was also the catalyst for the early 2019 rally to $14,000.
Chart of BTC's price action in 2019 from TradingView.com
Fortunately for bulls, reports have just revealed that all the leaders of the multi-billion-dollar scam have been apprehended.
Operators of Multi-Billion-Dollar Bitcoin Scam Apprehended
According to Dovey Wan, founding partner of Primitive Ventures, all members of the PlusToken leadership have been arrested:
“27 core PlusToken team members are all arrested by Chinese police, the biggest crypto scam in the history so far, $3B worth of crypto is scammed… there are a series of legal enforment actions in past 12 months as it’s core team are all over the world took quite a while.”
FINALLY
27 core PlusToken team members are all arrested by Chinese police, the biggest crypto scam in the history so far, $3B worth of crypto is scammed
Bulls now have little to no baggage
and lets send it to the
pic.twitter.com/SiDJVSqA5J
— Dovey 以德服人 Wan
(@DoveyWan) July 30, 2020
The commentator suggested that this is pivotal for the Bitcoin bull case as the coins they still hold are now unlikely going to be sold.
It isn’t clear what PlusToken’s administrators had when they were arrested. However, $450 million worth of cryptocurrency was moved from their addresses over the past few months. As reported by NewsBTC, DTC Capital’s Spencer Noon wrote on the matter:
“This week the following #PlusToken funds have been on the move to exchanges and new addresses for mixing: – 22k BTC ($203m USD) – 789k ETH ($183m) – 26m EOS ($68m) – 20m XRP ($4m). The big question: can the crypto markets absorb this volume or are we headed lower?”
Wan, citing information she knows, suggested the figure is closer to $1 billion. Whatever the exact figure, she added that with these arrests, “bulls have little to no baggage,” meaning Bitcoin can be sent “to the moon.”
One of Many Bullish Fundamentals
With PlusToken-related funds unlikely to be moved every again, a massive source of selling pressure is now gone. But this is but one of many positive catalysts for the Bitcoin and crypto market.
Mike Novogratz, CEO of Galaxy Digital, told CNBC on Tuesday that Bitcoin has the potential to reach $20,000 this year.
He cited the money printing by the central banks of the world, which should boost the scarce assets of Bitcoin and gold.
Related Reading: On-Chain Metric Signals the BTC Market Isn’t Overheated: Why This Is Bullish
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Unexpected Factor That Suppressed Bitcoin Bulls in 2019 Is Now Gone
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Nick Chong, Khareem Sudlow