Bitcoin Forum

Bloomberg (https://www.bloomberg.com/news/articles/2018-09-13/mystery-of-the-2-billion-bitcoin-whale-that-fueled-a-selloffMystery of the $2 Billion Bitcoin Whale That Fueled a Selloff)

When Bitcoin plunged as much as 15 percent over two days last week, a theory emerged -- where else? -- on the Internet: a whale was on the move.

Speculation mounted that a major holder of cryptocurrency with an electronic wallet that dated back to 2011 -- long before anyone had heard of HODL -- was moving to sell. His or her wallet had once had as many as 111,114 Bitcoins, which at their peak would have been worth about $2 billion. The rumors that began two weeks ago were that this whale -- as big holders are known -- was looking to cash out after this year’s plunge in prices.

Debates flared up on Reddit. Galaxy-like graphs were disseminated. And Bitcoin origin stories from Dread Pirate Roberts to Mt. Gox re-emerged.

The case has all the elements of a classic Bitcoin mystery: famous wallets, a vicious cycle of speculation reinforcing a selloff and intense amateur sleuthing on the Internet that might not have exactly hit the mark. It also shows what makes Bitcoin unique: the pseudonymous, public nature of its blockchain means anyone can attempt to trace transactions.

According to Chainalysis Inc., which provides cryptocurrency tracking tools to companies and law enforcement, 50 transactions involving a total of 50,500 Bitcoins originating from that whale’s wallet were moved between Aug. 23 and 30. Based on Aug. 22’s closing price in Bloomberg’s composite data, they would be worth about $320 million. Chainalysis said they cannot confirm that the coins entered exchanges.

Detective Work
“This is actually really interesting because of the Reddit detective work that’s been happening and just people making these assumptions that this whale is cashing out,” said Kim Grauer, senior economist at Chainalysis in New York. “It leads to conspiracy theories that someone’s trying to sabotage Bitcoin -- just from someone doing an administrative move of their funds for security purposes, or we don’t even know why they have done it.”

Chainalysis’s software helps detect money laundering by mapping relationships between addresses, which enables it to identify at least one counterparty in about 80 percent of transactions, Grauer said.

The narrative is also complicated by the fact that while the 50,500 Bitcoins originated from the whale (address: 1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a), most were scattered in 2014 to various wallets that might all be controlled by the same person -- or not -- and later moved to one wallet again. According to Chainalysis, there were only small transactions associated with this stash until last year, when a thousand Bitcoins were cashed out from the original address. Then there was again a period of little movement -- until August.

The Bitcoin community has a tradition of watching the wallets of these early hoarders, such as that of Satoshi Nakamoto, the pseudonymous creator of the cryptocurrency.

Dread Pirate Roberts
On crypto news sites, Reddit and Twitter, some onlookers speculated that the wallet is linked to Ross Ulbricht, who went by the alias “Dread Pirate Roberts,” the convicted operator for Silk Road, an online marketplace for illicit goods that was one of the early adopters of Bitcoin. Another theory is that it is associated with Mt. Gox, a collapsed Tokyo-based exchange that has to pay back its creditors by liquidating some of its leftover Bitcoin holdings.

As Bitcoin tumbled last week, the community was also afire with a longstanding exchange ShapeShift’s decision to start collecting users’ personal information and reports that Goldman Sachs Group Inc. was retreating on near-term plans to set up a crypto trading desk.

The timing of the whale’s moves -- in Chainalysis’s telling -- doesn’t exactly coincide with the price declines, but the speculation alone may have contributed to the selloff.

“There will always be these historical addresses that become a little bit of a treasure hunt almost -- who they are and when people move them really does spark interest,” said Danny Scott, co-founder at CoinCorner, a crypto exchange and wallet provider based in Isle of Man. “There’s so much noise around the industry and it’s hard to weed out what’s actually happening behind the scenes.”

I don't believe a word, but even so what type of theoretical moron would sell anything above a few hundred coins via some piece of shit exchange? The owner would have OTC buyers creaming their knickers. It's otherwise impossible to obtain that amount without driving markets insane.

@gentlemand. Was there a deposit to a shit exchange? I reckon that the article was only speculating that the movements of those coins, by the whales, might have caused the selloffs.

There was also a large movement of 30,000 bitcoins that came from Bittrex to an unknown wallet in block 541,229.

https://www.blockchain.com/btc/tx/9d18b7a097162ad96d3e12bd13c8e241bdb954b18deee968266e5ae36f642f39

https://image.ibb.co/neNjzp/image.jpg

Should that be speculated as bullish by Bloomberg? Not clickbaity enough, I reckon hehehe.

Bitcoin has been into rough weeks I guess because of this undying speculation in the arena of assumptions and articulated false news.

This market is so volatile as it is as the investor can be driven by fear-mongering and panic attacks.

I hope none have lost their lives on this heartwarming (cardiac arrest) moment.


Transaction successful. /Deep breath/ ash!

@Bitcoinsummoner. Hehehe but that transaction did only cost the sender $0.19 however.

In any case, yes it's funny. I still the same feeling when I send bigger transactions using any cryptocoin, especially in Aeon because I use the command line wallet. The GUI has a psychological effect that everything will be safe and secure, I reckon hehe.

every time the price increases people seek motives and often blame the Tether, and every time the price drops people look for a reason for the fall of the price and blame the Mt. Gox or the "Whales", this is getting very scary. it seems that the price always is manipulated and with this type of behaviors that people are adopting will only scare people and it will increase the wrath of the governments. The price fell because there was no demand, the price went up because it had demand, is not it better to leave things this way? why do we have to be accusing others?

@Slow death. Agreed but it is sometimes not as simple as that. There are specific causes on why bitcoin has low demand or high demand.

I reckon it is similar to what occured in Ethereum. The EOS development team has massed $4 billion in ETH and it stores them in maybe 2 or 3 exchanges which Bitfinex holds the largest quantity. Would knowing that increase confidence and demand in Ethereum?

Why would anyone store then (long term) at an exchange?   For me, it would decrease the confidence in ethereum if the developers haven't been paying attention the last 9 years.

If price increases/ decreases were so easily explainable, then price predictions would be easy too. Unfortunately, it is no simple and we should just accept those facts. As far as whales are concerned, they definitely will be able to move markets unless there is a massive increase in liquidity.

I don't think there will ever be a time where our current exchanges will experience a massive influx of liquidity. In all the years that I have been here literally nothing has changed when it comes to the available liquidity. It's partly the hostile nature of this market, but more so the shady nature of exchanges in general, and how easy it is to crack them or just pretend that they got hacked.

Also, the whales of back in the days grow with the market, which means that they right now have just as much authority over the market as back in the early days.

In the end there are two options;

1) people accept current market with shit exchanges and the 'freedom' wealthy entities have to pump or dump the market by any amount.
2) people go for a more centralized/regulated exchange environment with bells and whistles pausing the market after every 10% movement.

Decentralized exchanges aren't a thing yet at current stage so I have left that out.

Did anyone check if the forked coins on these original addresses have moved to exchanges? It could be a old timer that decided that he/she wants to put the final blow on forked coin prices, by dumping his/her coins at this time, when they are taking an hammering. A well timed dump onto these Alt coins now, would be the death blow for them.  ::)

So a mayor move like this, could have been done to acquire the forked coins and not to sell the bitcoins.  8)

Good one. People often complain about exchange manipulation being bad, but similarly they complain about regulations tightening money flows to be a bad thing, so which one is worse will be the question.

I personally think that we'll be heading (forced) closer to the second option, especially when institutions start to crowd this industry. At a certain point they will take over the spot market with their own regulated platforms.

In other words, the legacy institutions people try to avoid are inching closer and closer. Time will tell whether or not it will affect the development of this industry, but it's frightening for sure.

Bitcoin will be controlled more and more by whales from Wall Street, with the future trading it fuels more manipulations.

We might not know important details

Strictly speaking, we know almost nothing apart from the fact that a lot of bitcoins were sold in the open. And more importantly we don't know the motives behind this selling activity. We somehow implicitly assume that no big whale is going to deliberately hurt Bitcoin and that means to us not selling in the open market "anything above a few hundred coins". But what if there are other motives at play here? What if someone was intentionally selling these coins to move the price down according to their own, mostly unknown to us purposes and plans? I want to say we shouldn't be too quick on the trigger without having enough information about what's actually going on there. It is easy to judge and still easier to misjudge

The EOS development team are not storing their ETH longterm in an exchange. They might be the cause of why there is billions in selling pressure on ETH that is making the price go down.

Also, if the all the developers in the cryptospace have really been paying attention, it should decrease confidence. Ethereum cannot do what it was built to do, and the developers who have been paying attention do not reckon it will ever.

Isn't the same applying to Bitcoin? Currency versus not a currency because it can't scale on-chain?

I dislike everything about Ethereum, but we can't ignore the fact that they have the majority of the capital and developers in the altcoin field on board. Ethereum was quite oversold recently, and the way it jumped back above $200 on extremely strong volumes is once again pointing out how much confidence there is in Ethereum.

EOS (especially when it finally starts working) & Co will definitely accumulate market share over Ethereum, but the question is whether or not it's enough to overtake it. It may very well be that just like Bitcoin, Ethereum's first mover advantage could make it survive at all cost. Also, I rather have Ethereum occupy the second spot in market cap ranking than corporate garbage like XRP and BCash.