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Blockchain investor O.D. Kobo (Oded Kobo) has moved roughly $61 million worth of ‘ETH’ the cryptocurrency of the Ethereum blockchain platform from a large crypto exchange last week and is reported to be loading up on Altcoin’s.
For those who are not that crypto savvy, Ethereum is a decentralized, open-source blockchain with smart contract functionality conceived in 2013 by programmer Vitalik Buterin. Amongst cryptocurrencies, Ethereum (ETH) is second only to Bitcoin (BTC) in relation to market capitalization and is considered to be the only coin that has the potential to pose a serious challenge to Bitcoin’s dominance. The term “Altcoin” refers to any other cryptocurrency that’s not Bitcoin—in other words, they’re alternatives to Bitcoin.
Large crypto investors referred to as ‘whales’ typically send cryptocurrency from exchanges when planning to hold their investments for an extended period of time. Storing large amounts of money on an exchange presents an additional risk of theft, as exchange wallets are the most sought-after target for cryptocurrency hackers. The removal of ETH like this transaction reduces potential sell side pressure, allowing the price of ETH to increase more easily.
Cryptocurrency whales that own millions of dollars in ETH tend to move markets single-handedly. If a whale decides to exit an ETH position, there could be enough market impact to push down the price of ETH. It takes about $15 to $30 million of sell pressure to move the price of ETH down 2% on any given exchange.
Most new cryptocurrency investors fear whale accounts because of their potential to suddenly influence the market and throw off everyone’s plans. So, they are keenly watched as most of these whale accounts are held by anonymous persons or groups. There are many whale accounts operating in the cryptocurrency market. Some of them identify themselves and some do not. Usually, big companies invest in cryptocurrencies and hold them as reserves, such as Elon Musk’s Tesla and Jack Dorsey’s Square. But there could also be some early investors who invested in cryptocurrency and now their investment has grown manifold. The fact that Kobo is loading up on Altcoins demonstrates a continued belief in the crypto market and support of smaller cap projects.
Kobo entered the blockchain sector in August 2018 by leading a $50 million investment when Bitcoin was valued at roughly $6,900 and ETH at $280. The 47-year-old was born in Hong Kong, where he spent over a decade as a technology entrepreneur, developer, and investor in Chinese web portals. Not your average crypto investor, Kobo does not have a twitter account, a linkedIn profile that seems inactive for years, he has yet to appear on a podcast, or show up to any conference. In comparison to the flashy lifestyle of most crypto natives, uploading photos of private planes, flashy cars, and fashionable parties on their social media, he is considered an outsider. Still, market watchers pay attention to whale accounts and transactions such as this to get an idea of how a move by one or more whale accounts could influence the market.
The crypto market is continuing a rapid rally that has taken ETH to its highest ever price and saw Bitcoin racing towards records, propelling the crypto market to around $3 trillion from lows of $150 billion in 2020. There is no doubt that 2021 has been a breakthrough year for the crypto market and investors. We can speculate on what value cryptocurrency may have for investors in the coming months and years (and many will), but the reality is it’s still a new and speculative investment, without much history on which to base predictions. No matter what a given expert thinks or says, no one really knows. That’s why it’s important to only invest what you’re prepared to lose.
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