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Whale Alert Analysis: Scammers Have Bagged Bitcoin Worth $24 Million in the First Half of 2020

Leading blockchain tracking and analytics provider Whale Alert has revealed that scammers have been on a stealing spree as they have made away with $24 million in Bitcoin so far in 2020. Cumulatively, they have siphoned Bitcoin valued at $38 million over the last four years, and this excludes Ponzi schemes as they are a billion-dollar sector on their own.

Over $130,000 gone in a day

Scammers have perfected their art as some of them are looting more than $130,000 in just a day, and all they need is vigorous YouTube advertising, a bitcoin address, and a single-page website.

As per the report, “So far we have been able to confirm 38 million US dollar in bitcoin alone stolen by scammers over the past 4 years (excluding Ponzi schemes, which are a billion-dollar industry on their own), 24 million of which during the first 6 months of 2020. Some of the most successful scams made over $130,000 in a single day.”

Some swindlers are presenting fake crypto exchanges with unsuspecting investors getting lured. For instance, one scammer has been able to rake in at least $1.5 million in 6 months by offering a fraudulent exchange consisting of an amateur website with numerous grammatical mistakes.

Some scammers have, however, not been so lucky as they have been nabbed. Recently. A Romanian programmer who orchestrated the BitClub Network, which siphoned off investors’ funds worth $722 million, admitted to being a key player in the scam and may face a maximum five-year sentence and a $250,000 fine.

Supernormal profits

The scam market is depicted by high revenue, zero risk, minimal effort, and no taxes. Whale Alert predicts that by the end of this year, it will have skyrocketed by over twenty-fold since 2017 as the annual revenue will stand at more than $50 million.

Figure: Total Scam Revenue Per Year (Until the First Half of 2020, Excluding Ponzi Schemes)

This growth is being driven by elevated aggressiveness and professionalism because the scam industry began with the sending of malware and sextortion emails. Nevertheless, it has become sophisticated that scammers are establishing fake enterprises with dozens of websites, fraudulent social media accounts, and round the clock “customer support.”

According to the announcement, “The most prominent type of scam at the moment is the Giveaway, which features either a celebrity like Elon Musk or a well-known exchange and can net between a few thousand and 300,000 US dollars depending on the skill and effort put in by the scammers.”

The numerous crypto scams are taking place as Bitcoin trading hit a six-month low of 51% characterized by a snail speed in June 2020.

BTC Price Analysis as Whale Alerts Indicate More Institutions Buying Bitcoin

As Bitcoin soared to a new all-time high of $57,808 on the weekend, over a billion dollars’ worth of BTC has left Coinbase to unknown wallets in the subsequent days—an indication that more institutions should be announcing their entry into crypto in the near future.

Bitcoin’s price is now hovering around the $57,000 price level and according to whale alert 36 separate transactions have been made today—valued at between 351 and 391 Bitcoins—from Coinbase exchange to unknown wallets. The transactions which all took place between 4 and 5 pm UTC are valued at over $750 million in BTC and added up to 13,204 Bitcoins.

Last night, Whale Alert also tweeted that 4,501 BTC had left Coinbase for an unknown wallet. The transactions of today and yesterday mean that over a billion dollar’s worth of crypto has left Coinbase in the past 24 hours. Although it’s not known whether the transactions are related, the movement of the mass amount of Bitcoin most likely indicates another major institution is preparing to enter the cryptocurrency space.

As more institutions flock to Bitcoin—institutional investors and speculators trading large quantities of BTC have been taking on a new method to hide the real sizes of their trades—to cut the risk of exposing their intent to the market, be they bullish or bearish, which could cause them unfavorable price moves.

The transfers could also be indicative of an over-the-counter desk reshuffling its wallets, a Bitcoin not-quite-billionaire moving cash to cold storage, or even a money-laundering scheme. It’s difficult to tell for certain at this stage as the transfer generated a new address for each transaction to protect the transferer’s privacy.

Bitcoin’s dramatic price rise over the last three months has been mainly attributed to big-time institutional investors such as MassMutual, Grayscale, Square, and MicroStrategy backing the cryptocurrency. With the increased institutional adoption of Bitcoin, the digital asset added over $300 billion to its ever-growing market cap in 2020.

Institutional investment looks set to continue as Bitcoin has breached the $1 trillion dollar market cap. But what can we expect from the BTC price in the short-term?

Bitcoin Price Analysis

With Bitcoin dropping slightly to below the $57,000 mark, what can we expect from the BTC price?

Source: BTC/USD via TradingView

From the daily candlestick chart of the Bitcoin price, it can be seen that the BTC/USD currency formed a long green candlestick on February 17, successfully breaking through the convergence triangle interval we drew before, and the highest price reached $52,640. On February 19th, it successfully broke through the resistance line of the ascending channel with a larger body bar, reaching a maximum of $56,400, and opened a faster-ascending channel.

Although a Doji candlestick pattern was formed on February 20th, the bulls want to stand firmly above the pressure line of the ascending channel line, but the bears want to push the price down into the channel line. The forces of both sides are even, indicating slight uncertainty in the next BTC price move. However, the candlestick on February 21, indicated more buying power and the bulls now appear to have the advantage as they continue to push the BTC price to the next level of $60,000.

In recent days, the candlestick chart has closed above the 9-day Moving Average, while the Moving Average Ribbon continues to rise, which also indicates that investors are still bullish on the market.

Contrary to this assumption, if the bears push the price back into the channel, the first support level will be the 20-day moving average, which is approximately $48,400. If the BTC price falls below this channel, it will indicate that a short-term bear market may soon occur and move to the first support line we drew at about $43,842. If Bitcoin falls further below this level, then the currency pair may be corrected to a 50-day moving average of the day at approximately $40,711.

It can be seen from the MACD chart that the MACD line (blue) has begun to turn upstream and has already surpassed the signal line (yellow) with a constantly increasing opening amplitude. This helps confirm the formation of a short-term bull market which could see Bitcoin push for $60,000 in the next few days.

A 200 ETH Pre-Mine Address Was Activated After 8.5 Years

There is a reactivation of a pre-mine Ethereum address containing 200 ETH, valued at approximately $506,140. This incident occurred after a prolonged dormancy of eight and a half years, as reported by Whale Alert, a blockchain analytics and monitoring platform. This reactivation is not an isolated event; similar instances involving substantial amounts of ETH in previously dormant addresses have been noted in the recent past.

In December 2023, an Ethereum address with 11,640 ETH was reactivated, and similarly, addresses with 2,000 ETH re-emerged in October and September 2023. These reactivations come at a time when Ethereum’s market performance has been notably volatile. Following a significant price drop, the market observed a minor increase of 1.2%. Ethereum’s price volatility and these sudden movements of large amounts of cryptocurrency from dormant addresses have sparked discussions and speculations among investors and analysts.

Ethereum’s blockchain technology, a decentralized platform that enables Smart Contracts and Distributed Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party, has been a significant player in the crypto space since its inception. The reactivation of these dormant addresses is noteworthy because it may signal a shift in the long-term strategies of early investors or possibly indicate new movements in the market.

It’s essential to consider the broader context of these reactivations. In the cryptocurrency market, large transactions by ‘whales’ (entities or individuals holding substantial amounts of cryptocurrency) can have a significant impact on market dynamics. According to U.Today, mega accumulation of Ethereum by whales is ongoing, with notable transactions involving thousands of ETH. This kind of activity can signal confidence in Ethereum’s long-term value, despite short-term market fluctuations.

Moreover, the reactivation of dormant addresses might be influenced by the overall market trends and the advancements in Ethereum’s technology. Ethereum has undergone several updates and improvements, aiming to enhance its scalability, security, and sustainability. These developments could motivate dormant account holders to reengage with the market.

It’s also crucial to analyze the historical context of these reactivations. Ethereum’s early days were marked by a more speculative investment environment, with many investors holding onto their assets for long-term gains. The reemergence of these accounts might reflect a shift in these investors’ perspectives, possibly due to the evolving regulatory landscape or changes in market potential.