Genesis Trading CEO: Early 2017 Crypto Investors Are Now Leading The Massive Sell-Off

Michael Moro, the CEO of Genesis Trading, an over-the-counter (OTC) digital asset trading platform, has said that those who invested in cryptocurrencies in early 2017 have now started to sell “for the first time.”

As CryptoGlobe reported, bitcoin (BTC) dropped below the $5,000 mark (on November 19th) for the first time since October 2017. At press time, the flagship cryptocurrency is trading at slightly above $4,449 - as its price continues to decrease.

Commenting on the massive sell-off, Moro told TheBlock: “We are seeing the folks who bought in early 2017 sell for the first time today”, noting that until now the retail investors who entered the crypto market toward the end of 2017 had been leading the sell-offs for most of 2018.

Crypto Market Prices Starting From January 2017  

Moro added that investors who joined the digital currency market during the first few months of 2017 “are [now] getting close to their cost basis.” In January of 2017, bitcoin was trading at only around $1,000, but then its price surged to an all-time high of $19,783.06 on December 17th, 2017.

Soon after reaching record-levels highs of near-$20,000, the bitcoin price fell sharply (and quickly) to around $13,800 by January 1st, 2018. However, just four days later, on January 7th, bitcoin’s price increased dramatically again to $17,109.

This upward momentum did not last long as bitcoin’s value continued to decline during the month of February, briefly began surging yet again in early March (surpassing $11,000), and then traded significantly lower for the remainder months of 2018 - mostly within the $6,000-$9,000 range.

On November 14th, the bitcoin price dropped below the critical psychological $6,000 support level. Although it still remains unclear why cryptocurrency prices have fallen so dramatically, many analysts have (partially) attributed the market crash to the highly controversial Bitcoin Cash (BCH) hard fork.

University Researchers Say "Well-Informed Traders" Are "Key Drivers" Of Price Changes

In a related study, researchers at the University of Warwick recently analyzed crypto prices by looking at intraday price and volume data from CryptoCompare. According to both researchers (Daniele Bianchi and Alexander Dickerson), the “interaction between past volume and returns positively and significantly predicts future returns."

After carefully tracking cryptoassets between January 1st, 2017 to May 10th, 2018, the researchers found that “informed [crypto] traders who speculate on their private information are key drivers of the observed price changes.”

Bianchi, the assistant professor of finance at the University of Warwick, noted: “the cryptocurrency market is the perfect environment to exploit asymmetric information,” as its opaque nature allows those with the right information to “time the market, make money, and drive the prices."