Whale Buying $1.6 Billion Worth of Bitcoin Signals Optimism
There appears to be a surge of confidence appearing in the Bitcoin market, and today’s high value of over $57,000 is a real milestone and a clear indicator that confidence is back to how it was before Elon Musk’s infamous tweet back in May.
In fact, Bitcoin has gained 32% in increased value so far in October, which is quite a considerable increase, and as can perhaps be expected, the attention of the whales has been attracted.
A bitcoin whale is a cryptocurrency term that refers to individuals or entities that hold large amounts of bitcoin. Whales hold enough cryptocurrency that they have the potential to manipulate currency valuations, therefore when the whales buy in, it means that there is considerable confidence in the market.
For the first time ever, the market capitalization of the entire cryptocurrency market has reached $2.3 trillion, which is quite some feat, trouncing the most traded traditional stocks such as Facebook, Amazon and Google.
In such a frenetic market which is constantly rushing from strength to strength, it is perhaps not surprising that the big investors are back in the frame, and this week, a whale whose identity is anonymous has bought $1.6 billion worth of Bitcoin.
That is a huge investment, and constitutes a high point in accumulation by a single whale, however it is at an opportune time as quite often in the past, whales have bought in during dips in value, whereas this particular transaction has taken place when values are high and still rising, giving the impression that this investor is making a speculation that values will go even higher.
Given that some seasoned analysts have been saying that the value of Bitcoin is looking likely to go up to over $100,000 in the near future, there is a lot of positive sentiment.
Some say that one day in the not too distant future, Bitcoin could overtake gold as the de-facto store of value worldwide due to its increasing rarity, cementing its status as a commodity rather than a currency, albeit a commodity that has usable facets such as blockchain technological capability which solid assets such as gold do not have.
This rarity has been preserved despite a large number of Chinese miners giving up their mining activities in the middle of 2022 as a result of government crackdowns on cryptocurrency mining in mainland China, therefore fueling confidence that there is unlikely to be much change in the finite nature of Bitcoin, as mining activities in other parts of the world are now fully mature and despite China producing the majority of mining by using cheap or in some cases free electricity to gain an advantage, it has not got any easier to mine Bitcoin now the Chinese miners are far fewer in number.
MicroStrategy’s Michael Saylor today stated in mainstream media that it is entirely possible to beleive that should Bitcoin one day “flip” gold, due to its inbuilt scarcity, it would put the price of a single bitcoin at around half a million dollars.
Looking back over the past three months, Bitcoin’s value has increased by an incredible 90% since July 2022, and given its venture across the $57,000 mark as of 10:07 a.m. in London (according to Bloomberg), that places it $7,700 below its April record.
Currently, crypto is where it’s at. That is what is attracting the big investments whereas traditional asset classes in the non-digital sector such as stocks and bonds have been stagnant and have not appealed so much to the large investors with the clever money.
Given the increasing interest in investment in blockchain projects, the fast moving development cycle of protocols such as Hyperledger which is an open-source project that aims to create a suite of tools for enterprises to deploy Blockchain technologies quickly and effectively, and the confidence shown by whales who, as per today’s anonymous example, are confident enough to put $1.6 billion into Bitcoin in one go, the future is clear.
Traditional trading platforms in the derivatives sector in major trading cities such as Chicago often see deposits of between $50,000 and $200,000 for margin capital and smaller trades made on the derivatives market with that capital, however to see $1.6 billion by one trader be exchanged in one go is extremely rare.
It is becoming far less rare and far more of a normality in cryptocurrency trading, and that in itself is a concrete, black-and-white indicator of where cryptocurrency is going.