Are Whales Hijacking the Bitcoin Industry? There are concerns in the bitcoin industry over how some people who have massive amounts of the digital currency might be controlling the ongoing market. These people are often referred to as whales.
Craig Pirrong, a professor at the University of Houston, stated in a blog post at streetwiseprofessor.com that many of these whales that invest massive amounts of money in the bitcoin are hijacking the field. Pirrong states that their massive shares in the market could hurt other investors.
In his post, he says that these whales could try to invest in the bitcoin in massive amounts and potentially sell off what they have en masse. This would make it to where the value of the bitcoin might change in value dramatically. This could cause the bitcoin to rise or fall by thousands of dollars at a time, thus making it harder for traditional investors to get the most out of it.Advertisement
Reports suggest that around 40 percent of all bitcoins on the market are controlled by about a thousand people. Those people are referred to as whales for how they are dominating the overall market.
Many of these whales often coordinate with one another to complete sales and purchase the bitcoins among other digital currencies. This is an action that is completely legal in spite of its potential to dramatically change the overall value of the currency and make it a little harder for people to invest in.
Pirrong does not state if these whales were a major part of what caused dramatic spikes in the value of the bitcoin in recent time. But his words are putting into consideration the general worry of how some people might have an immense amount of control over the bitcoin industry. This comes as many people who invest in the currency are only investing in small amounts of money and are not as likely to directly impact the industry and make things change in value any further than they already have.
Even with this concern, there is a belief that the value of the currency could still change in many forms. This comes as the CBOE Exchange has allowed for bitcoin trading in recent time. This has helped improve upon how well the currency can be traded although there were two brief halts in trading after it was introduced due to volatility concerns.
The increase in trading has caused the bitcoin to grow beyond the $16,000 level. It had been at the $12,000 mark at the start of December 2017. The total reached as high as $18,000 on December 8 but it fell to around $14,000 two days later, thus directly impacting the overall influence and advancement of the market in general.
The rise of the bitcoin has been important for investors to look at as there is a strong chance for the currency to thrive and become strong over time. But even with this in mind, there are significant concerns over how the bitcoin might be tough for some people to afford and utilize as whales could impact the market.