Fearing further fall in prices, retail investors are falling for FUD and selling their crypto holdings in droves. Stay strong and don’t fall for FUD.
The last few days have been chaotic for the crypto market, with almost every cryptocurrency in red. For the first time in 2021, the price of Bitcoin, the largest cryptocurrency by market cap, went below $30,000. Other leading cryptocurrencies like Polkadot and Dogecoin lost as much as 21% value. Binance Coin, on the other hand, was down more than 10%. Overall, it was a bloodbath. It seemed that the entire crypto market was being massacred by some external factors. China’s crackdown against the crypto market turned out to be the biggest spoilsport.
The Asian giant has banned Bitcoin mining, and many regions in China are acting tough against Bitcoin miners, compelling them to leave the country. But is this bad news? Well, far from that! The truth is that it is good for the entire crypto market.
More Bitcoin Rewards for Miners
With over 70% of Bitcoin mining hash power, Chinese Bitcoin miners had way too much power over Bitcoin. Many believed that such concentration of Bitcoin mining hash power within one country could hamper the entire Bitcoin network.
After China’s crackdown against Bitcoin miners, the Bitcoin mining difficulty level continued to drop up to 3X for 14 days in a row. It means that every Bitcoin miner would be able to mine more Bitcoin per TH/s, which is good news.
Many have raised fears that with the reduction in the number of Chinese Bitcoin miners, the Bitcoin transaction speed will be affected. That is an incorrect assessment. It will have no impact on the speed of Bitcoin transactions and nor would it affect its cost. The only difference that China’s crackdown against its Bitcoin miners makes is that other Bitcoin miners will now earn more on their mining capacity.
A Healthy Correction, not a Market Crash
If you are worried that we will see a repeat of the Bitcoin crash that we saw in March 2020, you are mistaken. The current dip in Bitcoin prices is more likely a correction instead of a crash. Experts believe that the correction we are seeing now is healthy and it is the best time to get exposure to Bitcoin if you haven’t already bought some Bitcoins.
Bitcoin Whales are at it Again!
Bitcoin prices going below $30,000 may have made retail investors worried, but it had no impact on Bitcoin whales whatsoever. They are accumulating even more Bitcoins now as the BTC price is at its lowest so far in 2021. Are you wondering who the Bitcoin whales are? Then we will answer it for you. Bitcoin Whales are those with wallets holding between 100 to 10,000 Bitcoins.
It is interesting that with Bitcoin prices under pressure, Bitcoin whales have become even more active. A recently released report disclosed that Bitcoin whales bought 90,000 Bitcoins after BTC prices started plummeting. It makes further revelations saying that Bitcoin whales are holding almost 50% of all Bitcoins in circulation today. It shows that the small retail investors are being booted out steadily by the bigger players.
If the small crypto investors continue to sell every time there is a drop in the Bitcoin prices, we will soon see a time when 90% of all Bitcoins in circulation will be under the control of Bitcoin whales. That will be a sad day for the entire crypto market. But who is to blame here? It is crucial that small retail investors see the bigger picture here and not lose sleep over small corrections. Strong hands are the need of the hour today.
Bitcoin whales hold tremendous clout on the crypto market as a whole. When Bitcoin prices hovered around $40K, the whales began selling Bitcoin in droves. It spooked small retail investors, and they began a mass sell-off of Bitcoin, which led to BTC prices falling to $28,500. It turned out to be an attractive price for Bitcoin whales, as they began buying Bitcoins in droves, withdrawing 5000 Bitcoins from centralized exchanges.
In short, the Hashant team wants to convey to our readers that do not fall prey to the tremendous FUD doing the rounds in the crypto market now. It’s a matter of time when the tables turn, and market conditions start improving. Wait it out, and don’t sell at a loss. In the long run, the crypto market will come out stronger.