PlusToken Dump Could be Behind Bitcoin Price Drop
Many investors were predicting that the BTC price would again touch the roof after a prolonged winter in 2018, however, analysts warned that 2019 could be the consolidating year, and actual bull run might start after the Block Reward halving in early 2020. Now a Chainalysis report has suggested that the reason behind the falling price of Bitcoin could be the dump made by PlusToken holders.
We know the PlusToken scammers are still cashing out funds through OTC desks. Are they also dragging down the price of Bitcoin? Here's our analysis. https://t.co/1V2dXWwFs9
Chainalysis Assesment of PlusToken Dump
PlusToken was a Chinese cryptocurrency wallet which promised high returns to users who purchased the native PlusToken against Bitcoin and Ethereum. As a result, many people invested in the Ponzi scheme and soon the value of PlusToken rose to $350. News media houses reported that the scam accumulated over $3 billion before vanishing.
Chainlysis was able to track a total of 180,000 Bitcoin, 6,400,000 Ethereum, 111,000 USDT, and 53 OMG (OmiseGo) sent to PlusToken wallets. Scammers usually make use of mixing services to hide their transactions among hundreds of others. Chainlysis in their report claimed that despite the arrest of 6 people related to the scam, the pocketed cryptocurrencies were being liquidated through OTC desks mostly on Huobi platform.
The study claimed that the scammers were able to cash out at least $185,000,000 through OTC brokers. The blockchain analysis firm kept a track of on-chain and off-chain trading volume. They tracked that the on-chain volume of BTC from PlusToken is mainly sent out to 26 OTC brokers on Huobi and noted that after every large liquidation, there was a dip in BTC price. One such prominent liquidation happened on September 20th where scammers liquidated more than $34 million worth of BTC.
Source: Chainalysis
The study also found that scammers continuously liquidated their accumulated funds starting from mid-April and continuing till June when 6 arrests were made. The liquidation activity remained low in August but started to spike again in September when the price of BTC started to fall again. The study said,
"As we hypothesized, spikes in on-chain flow to OTC brokers correlate with drops in Bitcoin’s price"
