Cryptocurrency Expert and Centurion Invest Chairman H.E. Ali Kassab says that institutional investors are becoming crypto hungrier and scooping up the leading crypto assets amid the most recent volatile crypto market correction.
Bitcoin whales, the one-percenters of the world of digital currency, are on the move after significant gains over the last few months.
Whales usually have between 1,000 and 1 million BTC. The increase of BTC whale addresses (representing the most prominent players in the Bitcoin network) is due to institutional investors’ massive demand. According to sources, the current number of whales is around 1,850, with varying sizes of fortunes holding 42% of over 18 million Bitcoin currently in circulation.
According to a report published by Glassnode, an on-chain market analysis, and analytics platform, BTC (held in wallets holding 1,000 – 10,000) surged 14.18% between middle January to the beginning of February due to a massive accumulation by large institutions.
“When Bitcoin first started to correct on Feb. 22, the futures funding rate was hovering at around 0.15% even as it continued to drop. This indicated that overleveraged buyers aggressively bought each dip, and the market remained overheated despite the pullback. As a result of this, new buyers, who came in during this short-term downtrend, liquidated. This initiated a ruthless cycle of tumbling liquidations,” said H.E. Ali Kassab, who was awarded the CEO of The Year in 2018 by SMART SMB under the Dubai Economic Department’s patronage.
In fact, Bitcoin whales saw a supply increase of approx. 80,000 BTC in January, and large Bitcoin addresses disposed of around 140,000 BTC worth more than USD 6B in February.
Bitcoin whales, the one-percenters of the world of digital currency world with having between 1,000 and 1 million BTC each, are on the move after significant gains over the last few months.
Glassnode also noted that the number of Bitcoin addresses holding at least $1 million in BTC jumped above 94,000 for the first time in February 2021. It is clearly a ‘Bitcoin whale spawning season.’
“It is very likely that the current behaviour we see from wallets of massive proportions does not represent sales, but rather it is a form of “reshuffling,” crypto is being restructured in custodial wallets. This could mean deep cold storage. So, coins are on the move, and larger balances are being reclassified,” said H.E. Mr. Kassab.
Bitcoin had a volatile start of 2021, both in terms of price and supply. Institutional buying has been fuelling the price of BTC and keeping it around $50,000. In addition to MicroStrategy, which confirmed that it recently acquired BTC 19,452, increasing its stash to BTC 90,531 (USD 4.5bn), crypto asset managers are accumulating Bitcoin at a rapid pace.
However, the growing number of whales is causing concerns. “With institutional investors acquiring massive Bitcoin reserves, the market is exposed to potential risks. If any of the whales decided to exchange a large amount of Bitcoin, it could have calamitous effects on BTC prices,” hinted H.E. Ali Kassab. He continued, “Whales, in general, treat the digital currency like a stock market but never trade with their entire balance. And with more whales in the market, crypto users will have higher expectations concerning the future of Bitcoin prices.”
With the correction of BTC, institutional investors also understand that cryptocurrencies, while they differ in many ways, are still very dependent on one another. The market is intertwined, that when one currency starts to either go up or down, you can expect other currencies to follow suit. In fact, many altcoins follow the path of Bitcoin very closely.
Bitcoin and altcoins have an on-and-off relationship, which is no surprise for the two types of volatile digital assets. Bitcoin typically is bullish or consolidating for altcoins to perform well. If the market leader is stressed, altcoins take a much harsher punishment.
“Altcoin market must create independence from BTC if we want to see a consolidated and sustainable market for investors. The current trend, altcoins are following the dominance of BTC and therefore are not following a supply-demand rule, and this market is still suffering,” reflected H.E. Ali Kassab.
Of course, we cannot forget about Ethereum either. February was a record-breaking month for the cryptocurrency. According to Ethereum market analytics platform Dune Analytics, combined DEX volumes posted a new record of $63 billion in January. February’s volume currently sits at $59 billion and is on track to hit $67 billion at the month’s end. “Although we have seen some users migrating away from Ethereum-based DEXes, the confidence remains in the sector. After all, today, there is an ETH market cap of USD 187.13B . Yes, Ethereum offers higher risks. It also brings potentially higher rewards. It is now time for investors to start taking ETH seriously, said H.E. Ali Kassab.
H.E. Ali Kassab is a French national who was awarded the CEO of the Year in 2018 by SMART SMB under the Dubai Economic Department’s patronage. He is a self-made businessman & a serial entrepreneur with 20+ years of experience across multinational cloud software, digital payment ecosystems & Blockchain-based companies in the EMEA region, assisting in 15 ICO projects.
Behind H.E. Ali Kassab and CIEx, there is a dedicated and strong team of professionals with verifiable fiat and crypto experience whose aim is to help investors with little to no financial or crypto background and knowledge who eagerly want to enter the crypto market.
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