Liquidation by Hodlers Triggered the Recent Sell-off in the Market: Research

The entire cryptocurrency ecosystem is developed with one single purpose to prevent centralisation and give the world a new decentralised structure to conduct everyday business. But, according to data published by BitInfoCharts reveals that the entire network is much more centralized than anyone would like to believe.

BitInfoCharts found out that out of 11 million Bitcoin hodlers in the world, only 1000 of them control the 35.4 per cent of all BTC in circulation, which makes 0.009 per cent of wealthy hodlers control the market. And, out of those 1000, top ten account holders control 6 per cent of all BTC.


There have been debates on how ASICs mining causes problems in maintaining a decentralised network structure and can impact the prices of cryptocurrencies. These major hodlers, also known as Bitcoin Whales, have the power to manipulate the market or literally control the market. Given the cryptocurrency market is in its nascent stage, a small liquidation of holding by whales will cause a havoc in the market.

Let’s take a case, as per reported in Business Times, the centralized nature of activities have been reflected in the network’s transactional activity. Over the past 24 hours between Monday, June 11th (a day after Coinrail hack was reported) and Tuesday, June 12th, out of 200,000 bitcoin transactions between that period, 100 transactions accounted for 24 per cent of the money volumes.

If one or several such hodlers decide to offload their stake, the price of Bitcoin will crash immediately, and then small-holders will liquidate their position out of panic to save their capital and cycle continues and that’s what we witnessed post the Coinrail hack.

However, as per a report published by Chainanalysis, BTC now available for trading has increased by 57 per cent since December 2017 and at present, the supply of circulating bitcoins is evenly split between investors and speculators

Join the Discussion on Telegram

Comments are closed.