The beauty of the blockchain is that it contains a general ledger of all transactions that have ever occurred. Armed with a bit of tech savvy and a block explorer, everyone has the ability to follow the movement of funds from start to finish. While user data is more or less anonymized by way of encoded wallet IDs, you can trace funds to and from every wallet in existence. This may change with the new privacy coins that people are raging about, like Verge (XVG). This coin is rumored to be the most private coin ever, with its new Wraith Protocol expected to be released some time in the next 3 days. Many people are banking on this event as the catalyst for Verge to moon way past its current value of around $0.116. There have been tweets and other conversations on social media that have caused the price to skyrocket, as well as tweets that may have resulted in millions of dollars in sell-offs. But we’ve found something even bigger than that, and you’re going to want to read what follows.
Sometime between now, and New Year’s Eve. This week.
What we’ve seen so far is the build up, before #WraithProtocol.
— XVG Whale (@XVGWhale) December 27, 2017
What if one person, or group of people, had the ability to manipulate the market to such an extent that they could decide the price of Verge at any point in time? With the Wraith Protocol about to go live, such a person has much to gain if they are able to manipulate the market cap of Verge, so that it comes from out of nowhere to become the 20th highest traded cryptocurrency in the world. Such movement would create a tremendous amount of interest. So much so that if done correctly, it could move the value of XVG from 1 cent per coin to almost 29 cents per coin in the span of two weeks. Yes, that happened.
How the Market Cap of Verge May Have Been Manipulated
It just so happens that with a little research, we can identify a potential culprit. Using the Verge blockchain explorer website, verge-blockchain.info, we are able to drill down to the top 100 list of Verge wallets in existence.
The above chart tells us the following:
- 52% of all XVG in existence — more than half of the total market cap is controlled by 25 wallets. We do not know whether these 25 wallets are controlled by separate entities, or whether multiple wallets are controlled by the same person.
- At the time this article was written, the largest wallet (DQkwDpRYUyNNnoEZDf5Cb3QVazh4FuPRs9) contained 2,221,427,486 XVG coins. In November, at half a cent per XVG, that would have been worth about $11 million. At its peak of around $0.286 on December 23, such a volume would have been worth $635 million. Today, this wallet is worth about $258 million.
Now, the question is, how likely is it that such a scenario took place? Let’s look at the transaction history for this large wallet, using a recent sample of data, thanks to the blockchain explorer.
The rows in pink are sale orders, and the rows in green are buys. We see a few things happening:
- In the amount of time it took to write the beginning of this article, the whale’s wallet has grown from 2.221 billion XVG to 2.225 billion XVG, an increase of 3 million coins, or $350,000
- The whale is inflating the market cap for XVG. In the span of 2.5 hours, this account has sold 3.5 million XVG, and purchased 15.2 million XVG. In other words, they’re creating volume, while acquiring a substantial amount of coin
- Using ProHashing.com, another blockchain explorer, we can get more details on the dollar amounts associated with each transaction, and they are quite large.
What Happens Next?
It’s hard to say what will happen next. Keep in mind that I am not a financial advisor. This is not financial advice, and I do hold Verge cryptocurrency as do other members of the Cryptosumer team. We are all vested in the outcome of this possible market manipulation. Here’s what I think may happen…
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