Shrimpers are sweeping BTC off the market faster than at the peak of the 2017 bull market
In cryptocurrency slang, shrimpers are holders who have less than 1 BTC in their wallet. Right now, the number of shrimpers in the market is growing as fast as possible. Even at the peak of the historic bull market in late 2017, they weren’t arriving in such numbers.
Shrimp are near the bottom of bitcoin’s joke food chain, just above plankton. The lowest kind of cryptocurrency organisms are holders with less than 0.05 BTC. This is not the only classification of bitcoin holders, but it gives an idea of the size and importance of the various market participants.
Bitcoin shrimp are gaining ground
Previously, the number of small bitcoin addresses is steadily growing despite a deep correction in the market. The number of wallets with balances of over 0.01 BTC and over 0.1 BTC has been steadily increasing since early 2021.
However, this trend accelerated in mid-June 2022. During previous market cycles, such dynamics in the bitcoin network indicated a bull market acceleration. In contrast, during major market corrections, onchain analysis generally indicated a slight increase, stagnation, or even a decrease in the number of addresses with a balance of less than 0.1 BTC.
Well-known analyst in cryptocurrency circles @WClementeIII tweeted a 90-day graph of changes in the number of coins in the hands of small holders (no more than 1 BTC in the wallet). It shows the strong growth of bitcoins in shrimp wallets. The current values have left behind the levels of late 2017, when the market was dominated by bullish sentiment and the BTC exchange rate reached an all-time high of $20,000 at the time.
During that time, BTC managed to plummet to $69,000, fall 70% in price, and return to the landmark level of 2017. Bearish sentiment and extreme fear are in stark contrast to the euphoria and exorbitant greed that reigned over the market in late 2017. And yet the shrimpers are behaving just as they did then. Moreover, they are buying bitcoin even more willingly, believing that now is the right time to do so.
Why shrimp are buying BTC
The classic market axiom is that “retail is never right.” With 2017, it’s clear: Small investors were buying at the peak and big whales were dumping coins. They sold at the best possible time. But the situation is different now. Shrimp accumulates bitcoin in large quantities after it has already lost 70% of its value.
But there is a third possibility: the increase in the number of holders with a balance less than 1 BTC, does not indicate an influx of small private investors. It’s possible that people are simply splitting their investments, opening many wallets with small balances. This was pointed out by another well-known crypto analyst @woonomic. He wrote:
“Keep in mind that such data on the number of holders is extremely unstable and tends to be overly optimistic on short intervals. It takes a couple of years for the statistics to settle down. For example, it is assumed that small transactions are made by new people and then it turns out that they belong to an existing investor who has more than 1 BTC.”
Cryptocurrency podcast host @VentureCoinist, thinks the influx of shrimp is still a sign of an impending downturn.
“I’ll pretend I didn’t see what happened the last time this metric went up this much.”
Finally, another user @fusillifadi, posted data that seems to support Clemente’s assumption of organic shrimp growth. Citing data from cooper.co, he provided a graph of the average daily growth rate of wallets with balances under 1 BTC.
Since the end of 2021, year, we have seen a clear trend of shrimp growth that can only be compared to 2017. Although the last period of 2017 saw a much larger increase, the current numbers are ahead of the trend recorded in 2018-2021.
Shrimp buy bitcoins mostly from miners. In 2017, 49% of bitcoins sold by miners went to wallets with a balance of less than 1 BTC. In 2022, that figure rose to 75%. Other onchain statistics confirm the surrender of miners. Thus, we get the answer to the question of who supplies bitcoins to the shrimpers.
Hong Kong allocated another $50 million to the crypto industry
Hong Kong has allocated another $50 million to accelerate the development of the crypto industry after local authorities allocated HK$50 million (about $6.37 million) in late February to develop the Web3 direction. This is stated in a press release on the website of the government.
Legalization of cryptocurrencies in Hong Kong
According to the head of the Financial Services and Treasury Bureau of Hong Kong (FSTB) Christopher Hui, the pool of funds will be allocated, in particular, to organize major international Web3-events. Hui also said that the government will organize educational programs for young people, for which preparations have already begun.
In addition, the 2023 budget provides for the creation of a working group to focus on developing virtual assets and study the situation in the crypto market, development opportunities and the need for changes in regulation.
“Hong Kong is well positioned to become a leading hub for Web3 in Asia and beyond, and we attach great importance to virtual assets (VA) and Web3. The government is committed at a high level to developing this sector and providing a comprehensive support system for enterprises,” Hui said.
He added that the Hong Kong Monetary Authority (HKMA) is now working on regulating stablecoins to introduce them into the economy next year. The country also plans to improve securities regulations so that retail investors can access ETFs based on cryptocurrency futures.
Despite several personal initiatives, Hong Kong authorities are also working closely with mainland China, testing international payments in the digital currency and working with the Central Bank. In all, as of the end of February, more than 80 Chinese companies had expressed interest in operating in Hong Kong.
Bloomberg wrote about China’s support back in late February. The agency pointed out that after Hong Kong set out to develop the crypto industry last October, Chinese officials have become more frequent visitors to Hong Kong. According to sources, this interest is because Beijing wants to use the city as a testing ground for digital assets amid tight control of crypto activity on the mainland.
We previously reported that the collapse of the Silicon Valley Bank is spurring demand for crypto apps.
Tether printed for one billion dollars on the TRON network
Stablecoin issuer USDT is rapidly printing “digital dollars” in the TRON (TRC-20) ecosystem. This time, Tether printed another billion dollars in USDT, according to transaction details. The total number of USDT in circulation in the TRON ecosystem is over 42.1 billion USDT. By comparison, the Ethereum ecosystem issued significantly less – 34.2 billion USDT.
As TRONScan data shows, this is the second billion-dollar tranche issued by Tether for TRON. The last time the USDT-issuing company issued a similar amount of Stablecoin was on March 14. Since the beginning of 2023, this is the fourth transaction to issue such a large amount of USDT. As of 2023, the largest issuance occurred in February. At that time, Tether issued two billion dollars in USDT at once.
Amid the news, bitcoin barely reacted to the USDT pump. According to TradingView, the bitcoin (BTC) exchange rate in the BTC/USDT trading pair is $27,949, up just 1.4% overnight. Bitcoin has a market capitalization of $540.4 billion.
In early March, The Wall Street Journal revealed that Tether had opened bank accounts using fake documents and shell companies. It turned out that one of Tether’s Turkish accounts had been opened in the name of Denix Royal Dis Ticaret Limited Sirketi, which had previously been caught laundering money for a terrorist group.
Tether chief technology officer Paolo Ardoino ridiculed the publication on Twitter and said the WSJ’s information was untrue. Tether said it adheres to legal requirements to combat money laundering and terrorist financing, and uses KYC mechanisms of the highest level. Renowned cryptocurrency critic Molly White, for her part, said that The Wall Street Journal journalists couldn’t “just make this stuff up.”
We previously reported that major cryptocurrency exchanges have moved offshore.
Where are crypto exchanges registered? Major crypto exchanges have moved offshore
According to a report by platform CoinGecko, 21 of the 30 largest crypto exchanges (70%) are based in offshore financial centers – territories that want to attract companies from abroad through loyal laws and schemes with low or no taxation.
Analysts of the service note that offshore zones, as a rule, offer non-residents more financial services and on more loyal terms than “in the home country”.
Where are crypto exchanges registered? They choose islands
Seychelles, the Cayman Islands and the British Virgin Islands were among the most popular offshore locations for cryptocurrencies. These territories are also considered tax havens for many corporations.
Also, one in five Crypto exchanges in offshore locations (20%) are registered in the Seychelles. This jurisdiction has become home to many centralized exchanges. Among them, there are well-known major platforms such as OKX, KuCoin, and MEXC Global. Many companies are “moving” to the Seychelles because the Seychelles Financial Services Authority (FSA Seychelles) refuses to license and oversee activities or companies related to cryptocurrencies.
In total, according to CoinGecko, the top 30 cryptocurrency exchanges are listed in 15 different countries: 11 of the 30 platforms (37%) are in North America – mostly in the Cayman Islands, British Virgin Islands and the United States. The number of companies located in Europe, Asia and Africa is evenly split: 20% each (or 6 countries).
The number of companies offshore may grow
Because of stricter U.S. regulators’ policies toward cryptocurrency companies, many firms are having to move to more cryptocurrency-friendly countries.
For example, the Hong Kong government, to turn the state into a new crypto hub, has allowed retail investors to trade digital tokens such as bitcoin (BTC) and Ethereum (ETH). The Hong Kong authorities themselves admit that they want to create a “favorable environment” for developing the local crypto industry.
Also, Ras Al Khaimah, one of seven regions in the United Arab Emirates (UAE), is preparing to open a free zone for cryptocurrency companies. Entrepreneurs in these areas own 100% of their businesses and have their own tax schemes and regulatory frameworks.
We previously reported on the Top 5 low-cost AI tokens with huge growth potential.
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