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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Centralized Wealth: The Downside To Institutional Bitcoin Buying

Tony "The Bull" Severino
Tony "The Bull" Severino
1 year ago
4 mins read
altcoins bitcoin crypto alt season altcoin xrp ethereum ripple litecoin

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Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
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The recent Bitcoin rally to as high as $42,000 has been predominantly been driven by institutional investors suddenly waking up and realizing the asset’s long-term value potential. Buying in now, means not paying ultra-high prices some day down the line if it ultimately catches on.

And while FOMO from wealthy individuals seeking to protect that wealth has been rewarding for cryptocurrency investors, the ongoing centralization of BTC and wealth could have dangerous consequences down the line, that the asset’s creator had sought to avoid. Here’s why the wave of institutional buying might not be as positive as it seems on the surface.

The Great Wealth Transfer From Cash To Bitcoin, Nothing More

Bitcoin price is trading at $37,000 per coin currently and has never been in higher demand, all while the world is still under the grips of a global pandemic. Unemployment has also never been higher, and normal everyday citizens are clamoring for stimulus money to help them pay the bills, or to cover the cost of food and other basic necessities.

Yet more capital is flowing into Bitcoin than ever before. And unlike 2017, it isn’t only retail money. Retail investors are back, but the price per BTC is even higher this time around. They aren’t the ones buying up a massive share of the limited cryptocurrency’s supply at these levels.

Related Reading | Bullish For Bitcoin: US Inflation Expectation Breaks Out From Decade Long Downtrend

They’re buying negligible amounts that do contribute to the overall upside momentum, but the price appreciation has predominantly been due to wealthy institutions buying Bitcoin in large sums.

Massive OTC buy orders taking place behind the scenes are taking what little supply out of the market that used to be sold. It has made a lot of early crypto investors and retail investors who survived the bear market wealthy, and that’s been a positive change in global wealth distribution.

bitcoin btcusd

Institutional buying is said to be driving up the price per BTC | Source: BTCUSD on TradingView.com

However, with whales absorbing such a sizable share of the Bitcoin supply, in isn’t the same decentralized asset that caught the attention of early evangelists hoping for a better financial situation for all.

Forget Financial Freedom If Cryptocurrency Becomes Centralized By Current Wealth

Bitcoin as a technology enables a free financial future, but because it is offered on a free market – as it should be – over time it is coming into possession and therefore the control of the world’s currently wealthy.

The cryptocurrency’s original creator, Satoshi Nakamoto sought to free the world from third-party’s control over money. But if most of the Bitcoin supply is owned by the few, has the distribution of wealth at all been affected by its emergence as originally intended?

bitcoin wallet btc

Whale wallets with 1000+ BTC or more continue to accumulate | Source: glassnode via Arcane Research

Sadly, the answer is no. Even with the recent cryptocurrency “crash,” wallets who already own 1,000 BTC or more kept on buying coins. Only those already wealthy can afford to keep buying coins at $35,000 each, and those who already own $35,000,000 USD worth in a single wallet absolutely can be classified as “already wealthy.”

Bitcoin could have made them that wealth, and that’s wonderful. But will cryptocurrency evangelists cheer when the bulk of the supply is controlled and centralized at corporate treasuries and not citizens seeking financial freedom?

Related Reading | On-Air Screw-Up: Fox Business Correspondent Claims Entire Bitcoin Supply Is Lost

Over 2400 wallets own 1,000 BTC or more, for a combined 2.4 million of the 21 million total Bitcoin supply. That means only 2400 individuals or entities posses as much as 10% of the most scarce resource to ever exist.

And while these entities are pumping the price of Bitcoin for any crypto investors who got in before they did, the original intent of Bitcoin is becoming clouded by increased centralization of the same old wealth.

Without a real changing of the guard, the cryptocurrency will have failed at least a portion of its original mission.

Featured image from Deposit Photos, Charts from TradingView.com
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Tony "The Bull" Severino
Tony "The Bull" Severino

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Read more

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
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Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

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