Crypto prices dipped Monday following a so-called flash crash of Bitcoin on Sunday. And while Ethereum dipped as well, the second most popular cryptocurrency is still up significantly on the month.
Bitcoin’s weekend crash is being blamed on a single whale who sold 24,000 Bitcoin, according to crypto watchers on X. Bitcoin’s most recent peak hit $117,370 on Friday, not too far from the all-time high of $124,500. But Bitcoin is currently sitting at $112,660, well below recent highs.
“Bitcoin flash crash today, which wiped out $310M in long positions, has been traced to a SINGLE Bitcoin whale dumping BTC for ETH. The whale sold 24,000+ BTC, including coins that hadn’t moved in 5+ years, sending 12,000+ BTC today alone to the Hyperunite trading platform,” crypto analyst Jacob King tweeted on Sunday.
“They’ve sold 18,000+ BTC ($2B) so far and are in the process of dumping the remaining 6,000+ BTC ($670M). Most of the money is being moved into Ethereum, $2B bought and $1.3B staked,” King continued.
That sale seemed to set off a chain reaction and a flurry of selling with $100 billion wiped out in just 24 hours, according to Forbes, as traders seemed to worry about whether the optimism from Jerome Powell’s statements Friday might be a mirage. Powell signaled he may lower interest rates at the next meeting of the Federal Reserve in September.
But others are more skeptical that the price really swung due to a whale, suggesting that it could be due to “multiple whales,” rather than a single entity, according to The Block. Whatever the reason for bitcoin’s pullback, there’s no doubt that Ethereum has been faring better in recent days.
Ethereum is down almost 4% over the past 24 hours to $4,637, but is still up 24% on the month, according to CoinMarketCap. Why is Ethereum doing so well lately? There are a lot of different theories, including the popularity of spot ETFs, which now account for about $30.5 billion or 5.2% of Ethereum’s market cap, according to The Street.
But there’s also just been a lot of hype in mainstream news outlets about Ethereum, with a recent story in the Wall Street Journal touting all the big money that’s “piling into” the cryptocurrency. One of those investors is apparently Peter Thiel, the billionaire co-founder of PayPal. The Journal reports that people close to Thiel believe his “recent bets stem from a belief that the Ethereum network will keep growing.”
But that kind of hype should probably be taken with a grain of salt. Founders Fund, Thiel’s venture capital firm, quietly sold about $1.8 billion in crypto by the end of March 2022, not long before the crypto crash of 2022. Thiel had cashed out at a time when he was hyping crypto like crazy, telling a crypto conference in Miami around the same time that “we’re at the end of the fiat money regime.” Thiel made no mention at the conference that he was selling at what would be near the top just before a crash, according to the Financial Times, which only revealed his sales in January 2023.
Thiel really has a knack for buying low and selling high, which is the smart play for any investor with discipline. But that’s obviously not how markets actually work in practice, crypto or otherwise. People buy at the top because they fear missing out, and then get left holding the bag by guys like Thiel. The question, of course, is whether crypto’s most recent highs are sustainable.
The Trump regime’s embrace of crypto has been great news for the industry, but nobody knows whether the number can continue to just go up, given the uncertainty of America’s economic outlook. There’s also the small problem that crypto is little more than a speculative asset with no inherent value. Despite countless promises from crypto boosters over the past 15 years, the average person isn’t using crypto to actually buy goods on a regular basis.
The Block reports that big players like BlackRock, Grayscale, and Fidelity have seen $1.4 billion in net outflows for crypto last week, the highest since March, as investors get skittish. Other cryptocurrencies were also struggling Monday, including Ripple which is down 2%, Solana down over 4%, TRON down over 3%, and Dogecoin down 5%.