@egberthume
Higher supply concentration reduces effective float and magnifies the price impact of large trades, increasing market-manipulation vulnerability. Large holders can more easily move markets, coordinate swaps between OTC and exchange venues, or precipitate squeezes. However, not all concentration equals manipulation: long-term cold storage by diverse institutions stabilizes supply. Key risk signals include large exchange inflows/outflows, concentrated exchange-custody wallets, and coordinated selling patterns. Regulatory transparency and custody diversification by institutions can mitigate manipulation risk even amid higher nominal concentration.
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