The third largest Ponzi scam in history, Plus Token Wallet, could be responsible for the drop in prices Bitcoin saw last week. According to one analyst, the massive liquidation from the Plus Token scam caused an abnormal effect on the market, leading to increased sales pressure that forced miners to capitulate much earlier than expected.
The Chinese Ponzi scheme may have broken the crypto market cycle
The cryptocurrency market was caught off guard when, contrary to most popular predictions, Bitcoin's price fell from its bullish course and dropped to $ 6.600. However, the market downturn was not a surprise for those who followed developments around PlusToken, one of the largest Ponzi schemes in the cryptocurrency sector.
In August, CryptoSlate warned readers that the perpetrators of the PlusToken scam could flood the market with stolen BTC and cheap prices as they come out.
According to independent on-chain analyst Ergo, this is exactly what happened. The analyst delved deeply into PlusToken's Bitcoin holdings, as most public reports estimate that the company held around 200.000 BTC.
After accounting for hidden funds and mixed currencies, the analyst discovered that the company held around 187.000 BTC. Nonetheless, he said that a separate group of addresses captured with self-transferable funds could significantly increase this number.
A single address, which is a suspected collector of changes to make BTC payments to Huobi, liquidated over 22.000 BTC in November alone, with an average of just over 1100 BTC per day.
No end in sight for PlusToken's BTC landfill
If all the addresses the analyst has found associated with PlusToken continue to download their BTC at the same rate, there is little chance that BTC will remain above the $ 6.000 level.
According to Ergo's estimates, there are still around 58.000 BTC in unmixed coins currently in the addresses associated with PlusToken. If they continue to sell between 1000 and 1500 BTC per day, the downward trend could last well over a month.
Since Huobi is the exchange in which most of PlusToken's BTC has been liquidated, many have pointed out that it seems difficult to believe that the exchange has not been aware of the huge influx of bitcoins in recent months.
Built on the ruins of BitConnect, PlusToken stormed the Asian market, reportedly grossing up to $ 3 billion in various cryptocurrencies, including BTC and ETH. The mobile wallet was promoted across South Korea and Southeast Asia as a crypto-custodian that promised 6 to 18 percent monthly returns through arbitrage, trading and mining.
While six of the PlusToken leaders were arrested in July, the scam continued throughout the summer and will most likely continue until 2020 if major exchanges such as Huobi fail to implement measures that would stop liquidations.
