Plus Token 200,000 Sale Rumors Crash Market

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Plus Token, a Chinese pyramid scheme, has allegedly been selling some 200,000 on the open market in recent weeks, with the revelation of the news helping to comprehensively crash prices in last 24 hours. The scam, which convinced investors to send BTC to a wallet address and receive monthly interest, collapsed in late June when the ringleaders were arrested, and the proceeds are now apparently being liquidated to reimburse victims. This has caused a flash crash across the entire crypto market, wiping $25 billion off the total market cap in under 24 hours.

Strange Exchange Behaviour Linked to Sell-Offs

Suspicions were first raised that something was up when BTC crashed much harder and for a more sustained period yesterday, with the aggressive selling being atypical of what would have been expected at this point in the cycle. This is in addition to some odd activity recently on exchanges which have seen multiple 1,000+ BTC sales on the open market in recent weeks.

Details of the 200,000 began to surface when BTC was around $10,550, since when it has collapsed over $1,000, with alts unable to cope with the sheer force of the sell off and seeing double digit losses themselves. An investigation by cryptocurrency researcher and journalist Dovey Wan has found that the team are “moving their funds into small batches into exchanges, like 50-100BTC per batch” with most sales going through Huobi and Bittrex. These sales started in early July, which would tally with the date of the arrest of the scheme operators.

How Low Do We Go?

How much of the sell-off is directly related to the event and how much is fear selling is of course never known, but in situations such as this technical indicators usually go out of the window and we simply have to wait and see where BTC bottoms out. With such a huge amount of tokens still to be sold (one wallet alone still contains 95,000) we could well see further drops, and therefore further opportunities to load up at a discount.