How One Man Made the Price of Cryptocurrency Fall
It’s no secret that the value of bitcoins and other cryptocurrencies can be volatile , but on January 8 , the entire market experienced an unprecedented drop from which it still hasn’t recovered. There was no shortage of factors to blame at the time, from the threat of crypto regulation from national governments to frivolous major investments , but in this case, the fall in the value of Bitcoin could only be the work of one person.
Brandon Chaz, the creator of coinmarketcap.com, is to blame for the Wall Street Journal report. The 31-year-old developer launched the site in 2013 from his apartment in Queens, New York. It tracks the ever-changing value of Bitcoin and other cryptocurrencies by combining data from various digital currency exchanges . When cryptocurrencies went mainstream in 2017, coinmarketcap.com quickly became one of the most popular websites in the world, beating competitors such as Coindesk, Coinbase, and Blockchain.info. The website also appears to be making money through the Google ad network.
All of this sounds innocuous enough, but on January 7th, Chaz made a significant change to his website with enormous consequences. He decided to exclude trading activity in South Korea from the algorithm that fetched prices for coinmarketcap.com because prices in the country were consistently noticeable higher than elsewhere.
Chez hasn’t publicly announced the changes either. He simply did it by instantly bringing down the value of cryptocurrencies on the world’s most popular site for tracking this information.
The answer was almost instantaneous. Prices began to fall and (with the exception of a few rallies) have continued to fall since then. Meanwhile, coinmarketcap.com is still popular, and Chez has remained out of sight. The Wall Street Journal even sent a reporter to his apartment, but he did not open the door.
It would be optimistic to say the same will not happen again, but coinmarketcap.com or some other price check website could easily make Bitcoin’s value plummet in the future by tweaking its algorithm. This is a problem that has no clear solution – other than tough regulation that may already be in place. In the meantime, this is only the price you will have to pay for investing in gambling with cryptocurrencies.