2018’s Market Slump Was Not the Death Knell for Cryptocurrencies
The cryptocurrency markets witnessed a bear market in the second half of 2018. This time period was highlighted by Bitcoin and many other currencies touching their yearly lows. At the time of writing on December 31st, Bitcoin was trading at USD 3823.
While many were of the view that the slump could have sounded the death knell for cryptos. However, what wasn’t obvious to many was that the whales or the early crypto investors were potentially using this time period as an advantage.
Reportedly, these crypto whales have accumulated cryptocurrencies worth billions of dollars through the open market in order to prepare for the future rise in the prices of cryptos. The scarcity of cryptocurrencies in the future might be another one of the reasons for this stocking up.
Crypto whales can be described as former Wall Street, early-stage, high-net-worth cryptocurrency investors who own a large share of cryptocurrencies. With their large wealth, these whales are able to impact the prices of cryptos just by buying or selling.
The slump in the crypto market might have encouraged the whales to stock up on as many cryptos as they can at the lowest prices.
Interestingly, to circumvent the high trading fees charged by cryptocurrency exchanges, these transactions are rather carried out through Over The Counter crypto trading. OTC crypto dealers include Circle, Itbit, Coincola, Cumberland, etc. In fact, many of these whales seek out miners through social media networks such as WeChat, Skype, and Telegram.
Over the counter crypto trading services are preferred by wealthy investors who want to not only avoid the high costs but also want to keep other challenges associated with cryptocurrency exchanges at arm’s length. Even though OTC crypto trading is vulnerable to theft and hacking, however, it continues to be the preferred method of trading for whales as it is much cheaper.
Interestingly, after China banned cryptocurrency exchanges in 2017, the number of OTC crypto trading service providers has increased manyfold.