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On Monday afternoon, Bitcoin fell below $7,000 once again in the last month. Many enthusiasts are asking and trying to understand why the leading cryptocurrency dropped in this way. One of the reasons could be related to scammers that were trying to cash out.
Could Bitcoin Drop Be Explained By Hackers Cashing Out?
Bitcoin has been traded above $7,000 in the last few weeks considering this was a very important psychological level. However, just a few hours ago, Bitcoin fell below this price for the second time this month.
In a recent report released by Chainalysis, they explain that PlusToken scammers could be selling their coins to cash out. Although Bitcoin was affected, other cryptocurrencies such as Litecoin (LTC) fell even further. The cryptocurrency market lost around $7 billion, which is close to 3.5% of the total cryptocurrency market capitalization.
PlusToken is a crypto wallet that promised users high returns if they purchased PLUS tokens using other cryptocurrencies such as Bitcoin or Ethereum (ETH). However, the company was one of the largest Ponzi schemes ever in the market considering they were able to scam victims by around $2 billion.
The firm is currently cashing out its funds through different means. For example, some money was paid out to early investors that believed that they were really receiving funds. Nonetheless, scammers sent large amounts of ETH to their wallets. Around 25,000 BTC has also been cashed out. As reported by Chainalysis, the funds have been moved thousands of times across different wallets.
The company also explains that PlusToken scammers cashing out their BTC could have a negative impact on the market. Results show that when there is an increase in on-chain volume from PlusTOken, Bitcoin price tends to massively fall.
About it and how hackers are dealing with the funds, Chainalysis explained:
“Our regression analysis shows a positive, albeit small, statistically significant relationship between PlusToken transfers to Huobi OTC brokers and Bitcoin price volatility for the period of time between September 23rd and 28th.”
This could be the reason why Bitcoin has recently fall. Nonetheless, it is also worth mentioning that Bitcoin has been in a bear trend since June this year. The most popular cryptocurrency was not able to break above this trend.
Users are now waiting for the halving event that is going to take place in May 2020 and see whether it will have a positive influence on the price of Bitcoin.