BITCOIN's richest trader has lost $2.5billion in a single day as the volatile cryptocurrency market crashes once again.
The toe-curling loss comes at the currency plummeted a whopping 16.5 per cent on Saturday, shedding a fifth of its trillion dollar value.
The mystery trader, who owns the largest share of Bitcoin in the world – some 288,000 of them – began seeing their fortune fade in the early hours of this morning.
Wallet 34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo had $16.29billion worth of the crypto on Friday. By Saturday morning, that had dropped to $15.45billion then to $13.81billion by the evening, wiping out $2.48 billion in one day.
In fact, the unlucky trader has seen the value of his stash sink by $5.5million in less than a month.
BitInfoCharts shows the wallet – which has been trading since October 2018 and owns 1.53 per cent of all Bitcoins – clocking a high of $19.33billion on November 11 before dipping to $16.78billion several days later and then hitting a low of $13.8billion today.
It comes as one crypto trader said he lost millions of dollars in just under five minutes.
The anonymous Reddit user claimed he made $1.3million after investing in SQUID, the digital currency inspired by the Netflix series Squid Game.
The cryptocurrency surged to a top price of $2,681 before plummeting to $0.01 – a 99.99% fall over the last month.
Tech website Gizmodo had previously warned that the coin was likely to be a scam, commonly known as "rug pull" that happens when the creators of the new crypto quickly cash out their coins for real money.
The drop comes less than a week after Bitcoin reached a record high of over $69,000.
The sharp fall has wiped around $300 billion worth of value from the combined crypto market in just two days.
Bitcoin, the number one cryptocurrency reached a low $51,808.54 market value, according to CoinDesk figures.
All the other major players including ethereum, Binance‘s BNB, solana, cardano and Ripple’s XRP have experienced drops of around 10 per cent.
Why has the cryptocurrency market crashed?
The swings in cryptocurrencies follow a volatile period for financial markets, with spiking inflation forcing central banks to tighten their monetary policy.
China has also ramped up it's clampdown on Bitcoin mining, which helped cause the last crash earlier this year.
The omicron variant has also led to risk aversion over concerns about what it might mean for global economic reopening in the coming months.
Global stocks are down more than 4 per cent from a record in November, while haven assets like Treasuries have rallied.
The dollar has also been strengthening against other flat currencies and crypto this week, in part because interest rates are rising to drive down inflation.
How to spot crypto scams
CRYPTO scams are popping up all over the internet. We explain how to spot them.
- Promises of a high or guaranteed return – Does the offer look realistic? Scammers often attract money by making fake promises.
- Heavy marketing and promotional offers – If they are using marketing tricks to con customers you should beware.
- Unamed or non-existent team members – Just like any business you should be easily able to find out who is running it.
- Check the whitepaper – Every crypto firm should have a white paper. This should explain how it plans 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 reviews online and Reddit threads to see what other people think.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
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