Large Market Participants Do Not Affect Crypto Volatility — Research
Large investment companies don’t affect the volatility of bitcoin and other cryptocurrencies, according to the research results of the Chainalysis company.
It covered 32 bitcoin wallets, which together own 1 million BTC ($6.3 billion). According to some analysts, these legal entities and individuals have an impact on market instability. The data provided by Chainalysis demonstrate that this category is quite diverse, with only one-third of them to be called active traders.
All crypto holders were divided into four groups. The first included traders that regularly make cash transactions with bitcoin on the exchanges. They own about 332,000 BTC for $2 billion, but only one-third of them trade actively, and most of them entered the crypto market in 2017.
Miners and early bitcoin adherents, including 15 investors, who also own about 332,000 BTC represent the second group. The trading activity of this group is extremely low and was more active in 2016-2017 when prices for the first crypto increased.
The other two groups are represented by three “suspicious” wallets, which own 125,000 bitcoins (about $790 million), and “lost” wallets, where over 212,000 bitcoins (about $1.3 billion) are stored. Since 2011, no transactions have been made on the “lost” wallets.
The activity of all groups shows that they did not sell but acquired bitcoin at the end of 2016 and in 2017 and, during descending tendencies, respectively, did not provoke volatility on the crypto market, rather, on the contrary, stabilized it.
As previously reported, institutional investors began to invest in cryptocurrencies much more actively, choosing over-the-counter trading.