After a couple of weeks of steady price increases, Bitcoin shed almost $1000 in value in just a couple of minutes on Monday.
After May proved to the the best month for the coin since August 2017, Bitcoins record-breaking rally seemed to be destined for great things. Some analysts even predicted that it could go beyond the $20,000 mark seen at the end of 2017. Sadly this was not to be and a sharp drop led to a small increase and a stabilisation of $7954 at the time of writing.
Of course, its current value is still way above levels it was trading at one month ago and some remain hopeful that it could regain traction over the coming days.
The recent success of Bitcoin has been attributed to a number of factors including the fact that online searches of “bitcoin” reached an 18 month high last week, as well as a series of announcements from big brands who will be adopting crypto or blockchain technology.
But Bitcoin wasn’t the only loser as Ethereum and Ripple also faced a significant loss dropping around 7% of their value in the last 24 hours. EOS also lost around 10% of its value after experiencing an increase following a series of important announcements over the last few days.
No one is quite sure what caused the value of bitcoin to crash but it could have been down to something as simple as a single trade.
— Whale Alert (@whale_alert) June 3, 2019
According to a Bitcoin tracking Twitter bot, a Bitcoin whale moved some 25,000 bitcoin (worth over $200 million) from an off-exchange wallet to Coinbase. Moments later, 14,000 Bitcoin (worth $112 million) were moved from Coinbase to another wallet, followed by an additional 11,000 Bitcoin (worth $88 million). These movements could have pocketed the investor around $15 million in profit.
Whilst such moves are technically not illegal, they do cause the market to suffer and struggle with wild price swings due to whales moving around large amounts of cryptocurrency.
Earlier in May, a dip in the market was blamed on just one investor who decided to sell 5000 Bitcoin on the Bitstamp exchange. This sale triggered a mass sell-off and resulted in a crash that wiped $10 billion from Bitcoins market cap in under 10 minutes.
Bitstamp is investigating the incident to see whether the investor sold the coins off to create a crash, to then enable them to buy more coins at a lower price. Maneuvers like this can result in the investor earning millions of dollars in just a matter of minutes.
“This was a huge dump,” said cryptocurrency writer David Gerard. “This keeps happening, and has done for the past few years. A pile of short or long positions on the price will be blown by someone manipulating the price.”
Despite Bitcoin’s precarious dip in value, overall adoption rates are looking up. New York City-based crypto research firm Chainalysis Inc noted that Bitcoin’s total merchant volume was up 50% from the beginning of the year. This shows that the anti-crypto sentiment displayed by some businesses and merchants could be diminishing, resulting in an increase in Bitcoin economic activity.
A spokesperson for Chainalysis Inc said:”While merchant-services activity represents a small portion of Bitcoin economic activity overall, recent data suggests this activity may be rebounding following the 2018 price downturn.”