Today, May 10, 2020, the entire crypto market experienced a big correction. Just yesterday, the crypto market added a massive $13 Billion into its market cap. However, that along with a large chunk of previous gains has now been wiped out completely from the market.
You might be wondering what caused this humungous crash when we are so close to the Bitcoin halving event. As of the time of writing this post, we are just a couple of days away from this event. Naturally, everyone would want to make the most of the scarcity of Bitcoin's availability.
This possible bull run that Bitcoin would experience was the sole reason for the pump in prices that we saw through the previous couple of weeks. This correction however, was something that came out of the blue.
With no solid reason for the prices to experience such a high correction, it again looks like the Bitcoin whales were responsible for yet another correction. The whales and the miners seem to be manipulating the prices to be able to benefit the most. Read on if you want to know how the whales would be benefitting from this price crash.
Why would a price crash benefit anyone?
With the Bitcoin halving event so close, the price of Bitcoin is definitely going to rise to new all-time highs. It is just a matter of time before FOMO sets in and more and more people start buying into this.
As the FOMO of the halving has already set in, we were able to see massive gains after the crash we experienced in March 2020. Some of the whales might want to own more Bitcoins than they already do. However, they are not willing to pay the high price that Bitcoin was valued at after the recent pump.
This is why they started to sell their massive holdings and get the ball rolling. Since many new investors had gotten into the crypto world, it was easier for them to create a panic kind of situation. Once the whales sold their holdings, the price of Bitcoin dropped.
This is where the inexperienced traders panicked and ended up selling even their holdings. Hence, the price of Bitcoin dropped further. The whales will soon swoop in to buy more Bitcoin at a discounted rate that it is now available at. Thus, benefitting them the most.
How are miners affected by this?
This correction of multi-digit percentage was most probably, set into motion by the miner themselves. After the Bitcoin halving event, the rewards that the miners get will be half as that of today.
With their revenue cut in half, mining Bitcoin would no longer be very profitable. Hence, the miners are better off buying Bitcoin than trying to mine them. So, they seem to be pioneering the price changes to be able to get a large chunk of Bitcoin at a lower price.
The volatility in the market right now might be very scary. Many of you might still want to sell out your holdings. However, don't fall for this trap. HODL your Bitcoins through to 2021 and you will certainly be able to see some massive gains.
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