The richest trader on BITCOIN has lost $ 2.5 billion in a single day as the volatile cryptocurrency market crashes once again.
The huge loss comes when the cryptocurrency plunged a whopping 16.5 percent on Saturday, losing a fifth of its trillion-dollar value.
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The mystery trader, who owns most of the Bitcoin in the world, some 288,000 of them, began to watch his fortune fade in the wee hours of this morning.
Wallet 34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo had $ 16.29 billion in cryptocurrency on Friday. By Saturday morning, that had dropped to $ 15.45 billion and then $ 13.81 billion overnight, wiping out $ 2.48 billion in one day.
In fact, the unfortunate trader has seen the value of his stash sink to $ 5.5 million in less than a month.
BitInfoCharts shows that the wallet, which has been operating since October 2018 and owns 1.53 percent of all Bitcoins, posted a high of $ 19.33 billion on November 11 before falling to $ 16.78 billion several days later and then hitting a low of $ 13.8 billion today.
It comes when a cryptocurrency trader said they lost millions of dollars in just under five minutes.
Anonymous Reddit user claimed he made $ 1.3 million after investing in SQUID, the digital currency inspired by the Netflix series Squid Game.
The cryptocurrency surged to a high of $ 2,681 before dropping to $ 0.01, a 99.99% drop over the past month.
Gizmodo technology website had previously warned that the coin was likely a scam, commonly known as a "carpet tug" that occurs when the creators of the new crypto quickly charge their coins for real money.
The drop comes less than a week after Bitcoin hit a record high of over $ 69,000.
The sharp drop has wiped out around $ 300 billion in value from the combined crypto market in just two days.
Bitcoin, the number one cryptocurrency reached a low market value of $ 51,808.54, according to figures from CoinDesk.
All the other major players, including ethereum, Binance's BNB, solana, cardano, and Ripple's XRP, have seen drops of around 10 percent.
Why has the cryptocurrency market collapsed?
Swings in CRYPTOCURRENCY they follow a volatile period for financial markets, with an increase in inflation that forces central banks to tighten their monetary policy.
China has also stepped up its crackdown on Bitcoin mining, helping to cause the latest crash earlier this year.
The omicron variant has also led to risk aversion from worries on what it could mean for the global economic reopening in the coming months.
World stocks have fallen more than 4 percent from a record in November, while safe havens such as Treasuries have rebounded.
The dollar has also strengthened against other flat currencies and crypto this week, in part because interest rates are increasing to reduce inflation.
How to spot crypto scams
CRYPTO scams are popping up on the internet. We explain how to locate them.
- Promises of a high or guaranteed return - Does the offer seem realistic? Scammers often attract money by making false promises.
- Great promotional and marketing offers - If they are using marketing tricks to scam customers, you need to be careful.
- Unnamed or nonexistent team members - As with any business, you should be able to easily find out who is running it.
- See the whitepaper - Every encryption company should have a white paper. This should explain how you plan to grow and make money. If this doesn't make sense, then it could be because the founders are trying to confuse you.
- Do your research - Check online reviews and Reddit threads to see what other people think.
5 risks of investing in crypto
The Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments that advertise high returns based on crypto assets may not be subject to regulations beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, puts consumers at high risk of loss.
- Product complexity: The complexity of some crypto-related products and services can make it difficult for consumers to understand the risks. There is no guarantee that crypto assets can be converted back to cash. The conversion of a crypto asset into cash depends on the supply and demand in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment, which may be higher than for regulated investment products.
- Marketing elements: Companies can exaggerate product returns or underestimate the risks involved.
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