What happened? Why did we see a sudden $1000 decline in the spot price of Bitcoin from around 7.4k?
Many commentators are pointing the finger at the inaccurate reporting of Goldman Sachs ditching plans to open a cryptocurrency trading platform, whilst in reality Goldman is just prioritizing cryptocurrency custody solutions above the trading platform, as a result of regulatory uncertainty.
Why would Goldman abandon plans for a cryptocurrency trading desk, if Binance expects to make profits of over $1 billion this year alone, despite their low fees? Wouldn’t Goldman and its shareholders want a slice of the action?
There are also reports of a 10,000 BTC short position (approx. $74 million) being taken by an unknown trader 2 days prior to the Goldman Sachs fake news, as confirmed by the BTC/USD shorting charts on Trading View and that this could be insider trading from somebody who knew the Goldman FUD was coming.
This large short position came after somebody had moved 111,114 Bitcoins from a ‘Silk Road’ wallet that had been dormant since 2014, by using a Bitcoin mixer in a largely unsuccessful attempt to avoid the tracking of this large transaction. 11,114 Bitcoins were tracked to Bitfinex, 4,421 to Binance and 210 to Bitmex;
Whether or not this transfer is connected to the Goldman FUD and the large-short position is unclear. It may be, as some are speculating, that the owner of this wallet is exchanging Bitcoins for a mix of privacy coins such as Monero etc, the transfer of which would avoid the need for the use of a mixer. After all, owning a privacy coin like Monero is akin to having a Swiss bank account and I can imagine a lot more individuals with money to hide will start using Monero, Zcash, etc. I wouldn’t be surprised if Bono has got some. (By the way, why doesn’t Komodo ever get mentioned as a privacy coin? And why is it so often left-out of a list of PoS coins?)
Anyway, it seems that the decline could be in part due to a large sell-off Ethereum, by Digix, after DGD holders gave them the green-light to liquidate their Ethereum holdings. On September 5th, between 10:30AM and 11AM GMT, about 60,000 Ethereum were exchanged on Bitfinex, sending the price down from $280 to $265, followed by another 70,000 between 11 and 11:30AM GMT, causing a further decline to $260 and the market saw a correlating 4% decline in the spot price of Bitcoin from 7,3k to just under 7k.
It may simply be that Bitcoin hit a key resistance level at 7.4k, which also happens to be near to the 61.8 Fib retracement level and Bitcoin was unable to break through, causing a sell-off. The Goldman FUD no doubt helped precipitate this.
To maintain anonymity, Bitcoin tumbling is used to avoid tracking of transactions across Bitcoin’s public transactions log and any person’s ID connected to that address.
In order for someone to put their Bitcoins through the rinse cycle, the sender must connect to a Tor network and use a third-party Bitcoin mixing service. Some of the leading third-party providers of Bitcoin mixing are Helix, Bitcoin Blender, BitMixer, Bestmixer, Bitcoin Fog and Pay Shield. Bitcoin mixers have varying degrees of trust and reliability. There have been many instances of people losing all their Bitcoins by sending them to a service run by a scammer.
It can take a few hours to ‘clean’ the ‘dirty Bitcoins’ and fees typically range between 0.5% and 3%.
In Conclusion
What we really need is for the SEC to introduce a regulatory framework, then Goldman can open a trading desk and institutional money will really start to flow-in. What the hell’s taking them so long?
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https://www.reddit.com/r/Bitcoin/comments/9ceb5v/1b_bitcoins_on_the_move_owner_transfers_100m_to/
https://www.blocktrail.com/BTC/address/15ihHoGs3onQBNnEH8afDFGvou9nD62Hm7
https://cryptalker.com/bitcoin-mixer/
https://www.trustnodes.com/2018/09/05/flash-sell-off-200000-eth-sends-price-20-250
