Craig Wright Court Ruling Causes Jitters Among Nervy Investors

Neil Dennis

Some Bitcoin investors and enthusiasts are getting uncomfortable over the actions of Craig Wright, the self-proclaimed inventor of the world's largest cryptocurrency, and are beginning to fear another major downturn in the BTC price.

Wright has failed to comply with a US Federal court order instructing him to list his Bitcoin holdings prior to December 31, 2013, and could be held in contempt of court at a hearing which follows on Friday this week.

The Florida District Court order was issued under the ongoing lawsuit filed by Ira Kleiman - representing the estate of his deceased brother David Kleiman, former business partner of Wright - who claims Wright defrauded his brother out of more than a million Bitcoins following his death in 2013.

Investors Getting Nervous

Some investors are getting nervous that Wright may be ordered to repay the Kleiman estate the Bitcoin stockpile, allegedly held in a fund called the "Tulip Trust". If such a stockpile were immediately consolidated into cash it could have a significant impact on the price.

Others fear that Wright - known for his sometimes volatile and capricious behaviour and who claims to be Satoshi Nakamoto, the mysterious inventor of Bitcoin - if piqued by the court's decision on Friday could sell much or some of his own significant holdings.

One Twitter user said:

Another nervously asked a question of BitcoinSV (Satoshi Version) - a hard fork of Bitcoin Cash in November last year promoted by Wright: "Just wondering, what does the BSV community expect to happen to the coin if Craig Wright is indicted?"

According to a court filing on May 8, Wright had named seven trustees of the Tulip Trust, including himself and David Kleiman. The filing also pointed to the existence of a second Tulip Trust. 

While it remains unclear whether both, or either Wright or Kleiman created Bitcoin, the Kleiman estate's lawyer Vel Freedman has said "it is undeniable, however, that Craig and Dave were involved in Bitcoin from its inception and that they both accumulated a vast wealth of Bitcoins from 2009 through 2013".

Freedman took to Twitter last Friday saying that Wright had not complied with the court order to list his Bitcoin holdings as of the end of 2013.

While some investors may have appeared to be showing the nerves, the price of Bitcoin remained just below $11,000 by early afternoon on Monday, up 1.3% on the day. BitcoinSV, however, was down 0.4% at $238.

Time to Be ‘Cautious or Short' Bitcoin, Says Bollinger Bands Creator

Francisco Memoria

John Bollinger, creator of the popular technical analysis tool Bollinger Bands, has tweeted out it’s time to be “cautious or short” on the price of bitcoin, after the cryptocurrency’s price dipped below $10,000 for the third time since the so-called black Thursday.

On social media, Bollinger pointed out that bitcoin’s last move p over the $10,000 mark, which came shortly after U.S. President Donald Trump finished a speech on law and order in which he vowed to take “immediate presidential action to stop the violence” and said he was “mobilizing all available federal resources — civilian and military — to stop the rioting and looting,” was a head-fake.

A head-fake, Investopedia writes, occurs when the price of a security moves in one direction initially, but then reverses its course and moves in the opposite direction. These trades occur most frequently at key breakout points – for bitcoin, a key point was the $10,000 mark.

The price of the cryptocurrency dropped suddenly after breaking its key breakout level earlier this month over a flash crash on BitMEX that saw its price dip to $8,600 before it started recovering. CryptoCompare data shows that bitcoin is now trading above $9,600, but that since the March 12 coronavirus-induced market crash it has tested the $10,000 mark three times already.

Bollinger, it’s worth noting, has a decent track record looking at cryptocurrencies. In October 2019 the analyst accurately said the price of BTC dropping to $7,300 was a head-fake, and the price of the cryptocurrency then moved up in a significant rally to $9,500.

In April of this year, Bollinger tweeted out BTC was “moving into squeeze territory,” shortly before the cryptocurrency’s price started surging. He was, however, caught off guard by the Black Thursday sell-off, as were most investors and analysts.

It’s worth noting many in the cryptocurrency space are still bullish long-term. As reported early BTC developer Adam Back – who some believe could be Bitcoin creator Satoshi Nakamoto – has said he believes the price of the cryptocurrency will hit $300,000.

Featured image via Unsplash.