The cryptocurrency market has been in a staggering downward spiral in the last 24 hours. A major sell-off began yesterday which shed nearly $12 billion off the total cryptocurrency market cap in a single hour. Most media outlets have speculated that the sudden crash is largely attributed to Wall Street investment firm Goldman Sachs abandoning its plans to launch a cryptocurrency trading desk. However, a recent report suggests that a more likely explanation can be attributed to an ongoing sell-off of over 111,000 Bitcoin linked to Silk Road founder Ross “Dread Pirate Roberts” Ulbricht.
News broke yesterday that Goldman Sachs had made the decision to ditch its plans for opening a cryptocurrency trading desk due to uncertainties surrounding the cryptocurrency regulatory landscape. The firm has since redirected its focus in the direction of launching a cryptocurrency custody operation to serve large institutional clients.
“In response to client interest in various digital products, we are exploring how best to serve them in the space,” a company spokesman said. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”
In the wake of the announcement from Goldman Sachs, the cryptocurrency market proceeded to experience significant losses across the board. At press time 3 out of the top 10 coins have undergone double digit percentage losses in the last 24 hours. Leading cryptocurrency Bitcoin had been holding above $7,000 before dropping down to almost $6,000 in less than 12 hours.
It’s no secret that the cryptocurrency market tends to be highly volatile, and bad press like yesterday’s news regarding Goldman Sachs is often used to explain sharp market downturns. With that said, a recent report published in CryptoSlate makes the case that the recent market downturn is more likely due to an over 111,000 BTC ($710,856,210) sell-off from numerous wallets linked to the dark web black market Silk Road platform.
CryptoSlate reports that a community-driven investigation reveals that, in what appears to be a nearly billion dollar shell game, funds from wallets linked to Silk Road have begun dumping hundreds of millions of dollars into cryptocurrency exchanges Binance and Bitfinex. Many are suspecting that it is this large-scale Bitcoin dump that is the actual cause of market downturns.
Suggested Reading : Learn how Binance and Bitfinex compare in our exchange comparison.
A recent update from a Reddit investigation reads
“So it’s now obvious that the wallet’s owner :
- is very actively splitting his original 111,114 BTC this past month (a lot of transactions are very recent, see the amount of red nodes on the graph);
- some of this funds are currently being sold on Binance (picture 2 and 3);
- is very actively in the process of mixing, hiding and making difficult to track his coins (picture
- .Is the owner going to sell all his coins? How do you think this can impact the market?”
Silk Road Founder Ross Ulbricht is currently serving a life sentence in a United States prison. A proposed review of Ulbricht’s sentence was denied in late June. There have been no indications on which of Ulbricht’s accomplices could be involved in this probable money laundering scheme.
With only $110 million of the nearly billion dollar Silk Road fund accounted for on exchanges, the question remains of how much more volatility in the market this potentially record breaking sell-off is likely to cause.
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