Bitcoin, which has been bullish in recent weeks(nearly $9000), has crashed under $8,000 in a matter of minutes.
How did Bitcoin fall happen?
It’s been suggested by our experts that this is due to the sudden bitcoin dump, that has sent the market into a frenzy causing a single whale to cash-in on the profits.
Selling Bitcoin on a High and Buying it when Low has allowed crypto-whales to potentially make millions or even billions.
It is estimated that $25 Billion was dumped within minutes and it was not only the whales who profited from this. Exchanges like Coinbase also profited through the means of transaction fees and withdrawal fees.
What Caused Bitcoin Price to Drop?
As reported by a Twitter bot which tracks crypto-whales, a large bitcoin whale moved approximately 25,000 bitcoin($215 million), from an off-exchange wallet to the Coinbase wallet.
This caused the prices to fall, due to the influx of supply.
Within minutes, 14,000 bitcoins ($112 Million) were moved from the Coinbase wallet to the off-exchange wallet, then again an additional 11,000 bitcoins ($88 Million) were moved.
This causes pumping of price due to the artificial demand created in the Exchange.
Simple Math would say that the whale sold for $215 Million and bought it back for $200 million, thereby, making a profit of $15 million, while retaining the 25,000 bitcoins.
How did the Exchanges benefit?
Exchanges charge The three types of fees are:
- Deposit & Withdrawal Fees – Even if 0.1% is considered for deposit and withdrawal each, Coinbase made more than $4 million within a few minutes through deposit and withdrawal fees.
In totality, around $25 Billion was dumped and pumped. Thereby, exchanges made around $400 Million only on deposit and withdrawal fees.
- Transactions Fees – An exchange charges a transaction-fee and with every transaction, exchanges earn revenue. If you consider 0.1% of total transactions, then exchanges earn another $250 Million of transaction fees.
- Commissions – This is charged by exchanges to the sellers of the cryptocurrency. Anything around 0.1% to 0.3% is charged. Let’s say, $25 billion was dumped, then the exchanges would have made anywhere between $250 to $750 million through commissions alone.
When you add the fees that are charged, exchanges earn anywhere between $750 million to $1.25 Billion within a few minutes.
What is Positive News from this?
Be it bull run or bear market, crypto-exchanges make money either through deposit or withdrawal fees, transaction fees or commissions.
Our Analysts say that the dump is not the beginning of the bear market and they do not foresee any corrections in the market for the next few months or at least until Bitcoin reaches $9500.
In the next few weeks, you can have your Own White-Label Cryptocurrency Exchange up & running, and not miss out on the movements of whales enabling you to make money. You can just be one of the exchanges to earn profits from the manufactured pump and dump.
We integrate the highly secure exchanges with APIs of Binance or Kraken so that you can have liquidity and begin collecting revenue from Day 1.