LONDON: Bitcoin, the star of the cryptocurrency world, is widely seen as a freewheeling tool as open as the Internet itself.
But analysts have cast doubt on the veracity of that perception, highlighting that the bulk of bitcoin is in fact heavily concentrated in the hands of a powerful few.
Some 1,000 bitcoin holders — out of a total 11 million — hold some 35.4 percent of currency, according to BitInfoCharts.
These bitcoin “whales” — a word popularly used for big money players in financial markets — “literally control the currency,” said Bob McDowall, an expert in cryptocurrencies.
They can “dictate monetary policy, which is normally the function of a central bank or a government,” he said.
Unlike central bank-issued denominations, virtual currencies are produced, or “mined,” by banks of computers solving complex algorithms and freely traded online.
The other key difference with typical currencies is that the number of bitcoin in existence can never exceed 21 million.
There are currently some 17 million bitcoins in circulation.
Bitcoin’s surge in value from a few cents to a peak in December 2017 of $19,500 turned some of its first investors into billionaires.
The BitInfoCharts study also found that the top 10 account holders held 5.96 percent of the bitcoins.
Experts cautioned that the statistics should be taken with a pinch of salt, however, as several individuals could be behind a single account and one person could hold several accounts.
In a 24-hour period between Monday and Tuesday, the 100 biggest bitcoin transactions out of 200,000 accounted for 24 percent of the money volumes — an unimaginable level of concentration compared to other markets.
“In the currency market for example it’s such a huge market with so many transactions in a day that a pure actor can’t have any influence on a market,” Craig Erlam, an analyst for Oanda, a currency trading platform, said.
Big bitcoin players, by contrast, can hold a lot of sway over the market.
To try and prevent excessive falls in the value of the currency, observers believe that the “whales” may be checking with each other first before putting in major orders, leading to suspicions of fraud in this unregulated market.
US authorities in May opened a criminal investigation into possible market manipulation of bitcoin and other cryptocurrencies, suspecting traders of “spoofing” — putting in false orders and quickly withdrawing them to move the currency.
But Aaron Brown, former director of AQR Capital Management, who runs a bitcoin fund, said the role of “whales” is being exaggerated.
He admitted that a coordinated sale of bitcoin by the biggest accounts could cause the value of the currency to plunge but said that the risk was theoretical and that major historical investors in the currency have a strong sense of community.
Since the end of 2017, the concentration of bitcoins has decreased, according to a study by Chainalysis, a think tank.
Several long-term investors have sold their bitcoins and a new type of player has entered the scene — speculators, who tend to hold fewer bitcoins but carry out more transactions.
“The supply of bitcoin available for trading has increased by 57 percent since December 2017,” the Chainalysis study found.
Bitcoin ‘whales’ pulling cryptocurrency strings
Bitcoin ‘whales’ pulling cryptocurrency strings
- Some 1,000 bitcoin holders — out of a total 11 million — hold some 35.4 percent of currency, according to BitInfoCharts
- Big bitcoin players can hold a lot of sway over the market
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
