Everything You Need to Know About Crypto Whales

The largest marine animal is the whale, and cryptocurrencies are no different. The phrase describes people or organizations that hold or accumulate the most cryptocurrency.

A single Bitcoin wallet address with more than 1000 BTC in it is known as a whale. On the other side, those who possess significant holdings of other cryptocurrencies are referred to as “crypto whales.”

Crypto whales are a growing phenomenon in the world of cryptocurrencies, especially in connection to Bitcoin. In 2017, one Bitcoin “whale” drove the price to a record high of US$20,000 per token. Additionally, one of the biggest Bitcoin transactions ever happened in October 2020 when a user sent more than US$1.1 billion in Bitcoin. Although these instances are normal, it’s important to note that they have become increasingly frequent lately.

Whales profit while influencing the trading decisions of other bitcoin traders. It is crucial to monitor what these whales are doing because of this.

Whales and Cryptocurrency

Whales typically put a sizable sell order that is lower than all other sell orders in the market on the books. The price decline and chain reaction of panic make the market more erratic.

Once enough panic has been sparked, this will only stabilize when the whale withdraws their huge sell orders from the market. Now that the price is where the whales wanted it to be, they may accumulate more coins at their desired price. The following tactic is referred to as a “sale wall.”

Cryptocurrencies were developed with more anonymity in mind, therefore it is impossible to link specific accounts to specific people or organizations.

However, by looking at the blockchain data of those who have made their public addresses public, you may be able to identify at least some of the individuals who own sizable amounts of various coins. These people include several well-known Bitcoin whales.

It is estimated that Satoshi Nakamoto, the person who created Bitcoin, owns about 1 million of them. Formerly, 1% of all Bitcoin was controlled by the Winkelvoss twins, who were depicted by Armie Hammer in the movie The Social Network.

There are reportedly large Bitcoin wallets on exchanges including Huobi, Binance, and Bitfinex. Even if most of this money belongs to its owners, moving money between cryptocurrency exchanges has little effect on the market.

The Importance of Crypto Whales

Cryptocurrency prices are mostly influenced by supply and demand. The price of coins that are still in circulation increases when a sizeable portion of the total supply is held out of circulation.

As a result, the value of coins will decrease if they are suddenly sold in huge quantities. As a result, whales have a special opportunity to successfully influence the cryptocurrency market in their favor.

What happens, for instance, if a whale wishes to purchase more coins at a discount? All they need to do at this point is start selling a sizable portion of their assets. Due to the downward pressure this exerts on the market and the likelihood of a fire sale, the currency will become more liquid at a lower price. Then, they may just repurchase their coins and other coins for a reduced price.

The supply can be reduced by keeping these coins. When prices increase, the value of the coins they just bought usually increases as well. Although it is a greatly simplified illustration, it shows the power of whales in influencing the market.

Examples of Bitcoin Whales

Satoshi Nakamoto

Despite the fact that the narrative has recently taken a few unexpected turns, Satoshi Nakamoto’s mystery has still not been fully solved. A potential candidate for the title of “genuine” Satoshi Nakamoto is Australian businessman Craig Wright, who claimed to have collaborated with his friend Dave Kleiman in creating the cryptocurrency.

For half of his estimated 1.1 million bitcoins, Kleiman’s estate sued Wright in 2019. Wright would likely rank among the top three bitcoin whales if he had 1 million bitcoin, even though the case’s specifics are complicated due to Wright and Nakamoto’s secrecy.

Barry Silbert

Barry Silbert, the CEO and creator of Digital Currency Group, has invested in more than 75 bitcoin-related companies. Digital Currency Group also owns CoinDesk, a prominent source of bitcoin news.

Silbert apparently bought 48,000 bitcoins at the same US government auction as Draper.

Tim Draper

Tim Draper, an American venture capitalist, founded Draper Fisher Jurvetson, Draper University, Draper Venture Network, Draper Associates, and Draper Goren Holm.

Among Draper’s investments are Baidu, Hotmail, Skype, Tesla, SpaceX, AngelList, Twitter, DocuSign, Coinbase, Robinhood, Ancestry.com, Twitch, and Cruise Automation. He was also one of the first investors in bitcoin, buying 42,000 of the cryptocurrency at a price of $6 each and keeping them on the now-defunct Mt Gox exchange. After Mt Gox was hacked, Draper lost all of his shares.

In July 2014, Draper rose to fame after he purchased over 30,000 bitcoins that the US Marshals Service had acquired from the Silk Road bazaar. He is among the top 15% of all bitcoin investors with his current holdings.

The Winklevoss Twins

Early adopters, champions, and proponents of bitcoin were Cameron and Tyler Winklevoss, who were famously depicted by Armie Hammer in the film The Social Network. They are reportedly among the top three whales with more than 100,000 bitcoin.

Whale Watching – The Necessity

The majority of people will reply “no.” In the end, it serves the interests of crypto whales when their coins have a high value.

If you ride every bitcoin whale’s wave, you’ll be chasing your tail and wasting a lot of time. Keep an eye on the market generally and have a knowledge of why things are moving the way they are as a better long-term strategy for spotting and avoiding whale manipulation.

Long-term investment blunders can be avoided by having a plan for when you want to quit the market or a minimum profit you want to make, and sticking to it. For short-term crypto trading, establishing a stop loss and adhering to it will offer the same amount of safety.

The largest mammal in the planet is the whale. Moreover, the most potent investors in the cryptocurrency industry. Long-term investment blunders can be avoided by having a plan for when you want to quit the market or a minimum profit you want to make, and sticking to it. For short-term crypto trading, establishing a stop loss and adhering to it will offer the same amount of safety.