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Tron’s behemoths. Market’s 88% is in the hands of only 100 TRX owners

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A Reddit user who goes by the name “yannickmama” claimed some four months ago that Mr. Justin Sun (Tron’s founder and CEO) had scammed the Tron community by cashing out six billion dollars in TRX and running away.

The rumor soon reached many other online forums. It had Tron traders seriously trying to figure out what that would do to TRX‘s price. Ever aware of what’s going on on social media, Mr. Sun quickly addressed this situation in a series of tweets:

Mr. Sun was able to put the fire down and prevent a confidence crisis. Today, however, it seems that Tron enthusiasts have a new issue to worry about. Eighty-eight percent of the TRX currency is controlled by the top hundred wallets.

Tron and Moby Dick

They call them “whales.” Whales are those Tron investors who hold massive amounts of cryptocurrency, and they cause a bit of anxiety because they can create an artificial market fluctuation just by ordering a big buy or a big sell.

If there’s one thing everybody should know about financial markets is this: they’re not rational. Not at all. We would never experience global economic crises if they were. Financial markets are all about fear and greed, which is why they get us all into trouble every now and then (whether we participate directly in them or not).

A sale order triggered by only one of the whales, and even if it’s just a fraction of their holdings, could be huge for a typical day in the market. This would create panic among traders and would drive the coin’s price down. By the same token (no pun intended) a large buy order can increase the price artificially but it would make smaller investors confident, so overall demand would increase.

The thing is that most cryptocurrencies have been trading in the green lately, which means they’ve been gathering value. And the only way you make a profit from the current rising trend is to cash your digital assets out.

The better the market trend is, the more tempting this becomes. Especially for whales. That would leave the smaller investors in the cold. Keep in mind that Tron started valued at fractions of a cent and it’s now at $0.072, and that happened since last September only, it’s been a rapid rise.

The Bitcoin analogy

Yes, Bitcoin is still THE cryptocurrency so let’s see what this situation is in its case.

For Bitcoin, forty percent of the currency is held by a thousand wallets. This has been enough to worry some cryptocurrency investors. After all, the mythical Satoshi Nakamoto (the blockchain’s creator, Bitcoin founder, and anonymous code writer whose real identity remains unknown to this day) was very vocal in explaining that the whole point in Bitcoin was to get rid of the banking system and credit card companies precisely because they are controlled by a minimal set of very affluent individuals.

In other words, these trends in Tron and Bitcoin are defeating the original cryptocurrency purpose by reproducing the same environment as in the financial system in which a few can dictate terms to everybody else. The Bitcoin distribution of wealth is bad enough, but Tron’s is probably so much worse.

This is the wallet in which Tron keeps the TRX tokens that are not in circulation. It currently holds 34.2 billion tokens, which is something like 34% of the entire supply.

Etherscan’s public data is enough to see that, indeed, only a hundred wallets hold eighty-eight percent of Tronix (TRX).

So far nothing fishy has happened, but just imagine that a group of these whales comes together and agree to use their vast assets in order to manipulate the Tronix price for their own gain. This is possible as many whales are known to be friends, or at least to know each other.

That wouldn’t be fair play, of course, and this kind of behavior is penalized in traditional markets. But cryptocurrencies and their markets are still unregulated, so this kind of scheme would not only be possible but, believe it or not, legal (not criminal at the very least). And it would be hell for Tron’s smaller investors (which in this case means all the rest)

Tron and wealth concentration: What’s the future?

Cryptocurrencies, their exchange, their value and their popularity have grown exponentially recently, and regulators have just not kept up. They are only starting to notice it now.

Is price manipulation the same as fraud? Well, it’s still a grey area. Most laws and investors consider price manipulation to be foul play, but it is not inevitably a criminal activity, according to laws. Bittrex has worked hard to prevent this kind of situation. Also, every token has a different structure, some of them could be eventually classified as a security (Ripple is facing that problem right now) so different tokens will have to be regulated in different ways, most probably.

Cryptocurrency hedge fund managers tend to closely follow any activity by the whales in order to gain insight into the market. This information can indeed be handy, but only when it’s interpreted correctly. And that correct interpretation is tough to come by when you don’t have direct access to the inner circle, so it all remains guesswork.

How can we fix it?

Confidence in Tron’s future performance could make the whales keep their TRX. But continued good performance will also increase their temptation to cash out as selling is the only way to rip the financial benefits.

However, if TRX really becomes a currency that can be used in the real-world, then the whales would be better off spending their tokens in the real-world rather than selling them in exchanges. This would considerably lessen the risk for the smaller investors.

The fact remains that, even with this situation looming on the horizon, there are still plenty of reasons to be optimistic about Tron. The Main Net launch is just seven days away, and the rumor has been circulating about an imminent Coinbase listing.

But the question remains, how can we fix it? Sadly, the answer is that we can’t, but maybe Justin Sun can. Will he? At this point, only he has those answers.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pxhere.com

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

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The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

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Altcoins

Top 3 Coins to Buy Before They Go Big

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Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

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Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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crypto credit cards
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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

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