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Crypto-scam exit may have caused Bitcoin price crash, not COVID-19

Prior to the latest weekly closure, Bitcoin started a significant sell-off that saw price crash by over 17% in less than 72 hours. From a macro perspective, all financial markets have been heavily hit with talks of a global recession triggered by the novel coronavirus.

While the logical connection would be a shared sell-off due to fear across several asset classes, this might not be the case for the latest Bitcoin price crash that dragged the entire market down alongside it.

In 2019, the Ponzi scheme PlusToken had robbed investors out of a total of $3 billion (180k BTC, 6.4M ETH, 111k USDT, and 53 OMG). Their stolen “chips” are in crypto in addresses closely monitored by multiple people and organizations, one of which is Ergo on Twitter.

According to the analyst, 13k Bitcoins were moved through a process called “mixing” which seems to be related to the PlusToken exit scam. That may have caused the heavy price crash.

Over $185,000,000 worth of Bitcoin were previously sold through Huobi OTC dealers as found by blockchain analysis firm, Chainanalysis.

As can be seen in this graph, each Bitcoin unloading incoming from PlusToken addresses has caused price declines. While correlation does not necessarily translate to causation, the coincidence is rather peculiar to say the least.

Source: Chainanalysis

Yesterday’s trading volume and the amount unloaded was, again, not usual in any way. Over 21,000BTC were sold on Bitfinex in a single day; $100,000 market sells occurred consistently and continuously throughout the day that eventually lead to the price break of $8,000.

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