Chinese Crypto Scam Unwind Suggests Bitcoin Risks Extending Drop
Comment of the Day

December 17 2019

Commentary by Eoin Treacy

Chinese Crypto Scam Unwind Suggests Bitcoin Risks Extending Drop

This article by Olga Kharif and Zheping Huang for Bloomberg may be of interest to subscribers. Here is a section: 

Chainalysis estimates that PlusToken conspirators have sold about 25,000 Bitcoins and another 20,000 Bitcoins are spread out across more than 8,700 anonymous crypto addresses. Additional coins such as Ether were also used to bilk investors.

“That’s certainly something to consider when you are thinking about where the price is going, at least in the short term,” Kim Grauer, senior economist at Chainalysis said in a phone interview. “It could be, according to our research, continued downward pressure.”
 

Eoin Treacy's view

Bitcoin and the other cryptocurrencies do best when there is a clear supply inelasticity argument. The liquidation of the Mt. Gox bankruptcy hoard was a significant contributing factor in the decline posted in 2018 and the unwinding of the PlusToken stash may be a factor in the current downtrend.

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