The crypto world has seen more than its fair share of scandals, fraud, and scams. Above them all stands Bitconnect; by far the largest loss of money and the most damaging public relation crypto scandal to date. Today, it seems we stand on the literal “Verge” of yet another potential exit scam. It was announced that 18 million XVG coins were transferred from a recently formed donation wallet into the Binance exchange. On March 22, 2018 the Verge team announced the upcoming formation of a partnership with a “global organization with a vast network of high traffic sites.”
The 76.2 million XVG coins (approximately $6.4 million USD) raised will pay for a massive marketing campaign. However, today’s transfer combined with dubious details makes for the perfect conspiracy theory that Verge is an imminent large-scale exit scam. If this is not a misunderstanding, it will raise a very interesting question: What will happen if Verge fails. One answer is clear. It will create a monetary and confidence loss and the ripple effect will bring down the price of Bitcoin.
Today, Verge (XVG) has a market cap of $1.2 billion USD. In the event of a collapse, investors stand to lose the majority of these funds. And while Verge represents only .004% of the entire crypto currencies market cap, its collapse will no doubt create secondary effects. To put it in perspective, the total Verge market cap is almost equal to the entire amount of crypto currencies stolen since 2012 ($1.3 billion USD). In addition, a loss of this magnitude will no doubt create a ripple effect in the price of Bitcoin and altcoins. All the recent gains will be wiped out and the price of Bitcoin will surely drop to $6,000 or below in as short a time as it went up. Not to mention that all confidence in the market will be lost.
The intangible effects of another high profile scandal are hard to predict. But it is not hard to surmise that there will be a major loss of confidence to go along the loss of money. Investors are just beginning to trust the crypto market; this shows in the jump in price just a few days ago. Private sector and capital funding is speeding up development. Unfortunately, all these efforts will slow down if Verge fails. And all the hype in the world will not be enough to save a coin when the money runs out.
However, as ominous as the future of Verge appears, there’s reason to hope. Flipkart, India’s biggest online store is making noise of a partnership with a major crypto currency. This rumor leads analysts to believe that Flipkart may be the mysterious partner that Verge will announce tomorrow. If this is true, then it will reverse all the FUD about Verge’s imminent exit and will replace it with a jump in price. Only time will tell what tomorrow will bring, but with uncertainty still looming, Verge’s prospects are no better than 50/50.