Ethereum is a very popular token in the environment of the ICO. Selected because of its stability, the air at the same time, inevitably loses it every time one major project decides to cash out part of your own inventory. The reasons figured out the author news.Bitcoin.com Kai Sedgwick, and the editors of CoinMarket.News has prepared a translation of his analytical articles.
“Kryptonite” is usually considered the rich traders who are able to change the market, only one sale transaction. However, most large whales are not traders, and the ICO, whose stocks of live millions total value in billions of U.S. dollars. More than 3% of the volume of the ether is in the hands of the ICO, and when they are cashed (which occasionally happens), the consequences can be significant.
Ethereum is in the power of cashing ICO
On Sunday, when the situation on the stock market was generally volatile, Ethereum rate unexpectedly fell from $ 516 to $ 464 in just two hours. Up to this point the air was one of the most stable token compared to other altacaine in the pilot, who suffered the most. The fall in the value of Ethereum has led to the fact that the token was one of the worst cryptocurrencies of hundreds at yesterday’s ratings. The reason for the jump in prices is the sale of a large part of its own supply of air of one of the companies that started ICO last year. If so, then the collapse of prices for ICO is not the first time and may occur in the future.
Of the total funds raised through crowdfunding the sale of tokens in 2017, 5.7 billion dollars was obtained in the ether equivalent. All of these projects required time from time, to withdraw part of their cryptocephala in Fiat money to cover expenses, which do not include the payment for virtual currencies. As a rule, cashed the whole amount for a lump payment. And what’s good for these projects does not always bring good news for the rest of the market, especially for traders whose plans fall apart due to the sudden fall of ETH.
The cryptocurrency markets are much less liquid than traditional financial markets. When hundreds of thousands of tokens ETH are sold openly, usually with the help of exchange like Bitfinex or Kraken, the price is instantly reduced. Traders are always tracking even the slightest movements in the market, people are skittish and even the slightest possibility of decline may be a cause for concern. The clearest example is mass panic due to the possible collapse of one of the BTC whales, the Japanese exchange Mt Gox. Since all concerns have reduced the degree.
12 hours before the course Ethereum fell on a Sunday, the EOS has transferred 50 000 ETH on your wallet in Bitfinex. It is unknown when the company intends to sell them; the transaction only indicates the intention to do it. Usually astute traders are watching the wallets large ICO. But if the proceeds are transferred to the ETH exchange, it may become a self fulfilling prophecy about the collapse of prices.
At least 3.4 per cent of the ether hold ICO
A Twitter user under the name #33kByJulyMoku ⚡ app claims that someone gave him data on the stock of Ethereum. So, roughly 3.4% ETH (or 3.4 million tokens) own ICO. When these projects accumulate bills for payment, or increases the fear that the market may again go into a negative trend, they cashed the stocks. No one forced these “whales” to sell the tokens directly; mostly, they put them up for auction on the exchanges. As a result, the air mass is the pressure that does not feel, perhaps, no one scriptactive.
Until then, until the majority of ICO was attracted by the air, a large part of the tokens will be concentrated in the hands of about a hundred projects, each of which can withdraw them in cash at any time. The market is in any case will recover, but not earlier than the traders (especially those who used leverage) absorb huge losses. But a blessing in disguise, because every time prices fall, traders can stock up on cheap tokens before everything will return to normal.