What Are Bitcoin Whales and How Do They Affect Crypto Markets?
While you’ve likely heard of Wall Street’s wolves, you may not be acquainted with Bitcoin whales. They may not have anything to do with the animal world, but these monikers represent the most powerful financial digital assets and virtual money.
What exactly is a Bitcoin whale or a crypto whale? Once again, this is one of those obscure yet important cryptographic concepts.
Here, we’ll look at a few well-known Bitcoin whales and see how their actions have ripple effects across the cryptocurrency market.
What we are going to learn?
What is a Bitcoin Whale?
A Bitcoin whale is a speculator with a large digital currency position. For example, a Bitcoin whale may have hundreds or even thousands whereas a typical Bitcoin investor may have only one Bitcoin in their portfolio.
Whales isn’t limited to crypto slang alone. The word whale describes an investor with a disproportionate quantity of stock or cryptocurrency holdings relative to others.
This is an aspect of cryptocurrency that you should always watch out for. Other than being smart, you should also engage in trading, which is safe and reliable.
Moreover, whales not only trades on DEFI exchanges, many also trade their coins on reliable centralised exchanges or alternative crypto trading websites like BitAlpha AI, which help connect traders to experienced brokers throughout their journey.
In the same way, you may purchase toilet paper; Bitcoin whales buy bitcoin. And they’ll probably keep doing so as long as there’s Bitcoin left to mine, which will be depleted by the year 2140.
Some Bitcoin whales are larger than others since whales come in a variety of sizes. The same person or organisation might have many addresses, making it difficult to estimate the number and size of whales accurately.
Currently, at the time of writing, there are just 4 addresses that holds in between 100,000 to 1,000,000 Bitcoins and around 99 whales with Bitcoin holdings in between 10,000 to 100,000.
What Effect Do Whales Have on the Price of Bitcoin?
Knowing what a Bitcoin or crypto whale is and how it affects the price of Bitcoin is a critical next step. In particular, whether you’re looking to invest in Bitcoin or already own Bitcoin.
Whales are known for making a splash when they make a move because of their enormous market share. Several factors might cause the price of bitcoin to fall, such as when a significant investor chooses to sell a substantial volume of bitcoins in a short period. A whale might sway market patterns in whatever direction it wants (Market manipulation is possible here).
Let’s imagine a whale with 100,000 bitcoins wants to add to its holdings. Selling 50,000 of them would attract other investors to liquidate their holdings, which would almost certainly cause the price of Bitcoin to fall. This may cause panic among the investors and they may start to panic sell. This would allow the whale to profit and increase its holdings by repurchasing its 50,000 Bitcoins (or even more).
Put another way, they may take a dip and then purchase the dip they made.
This hypothetical scenario illustrates how much power a whale has on the market. Depending on their actions, prices might fall or rise (as with other assets like equities), putting pressure on smaller investors to keep up.
Other investors pay careful attention to whales because of their power to move the market. If you call it whale watching, you’ll see where the market is headed by keeping an eye on the whales’ movements.
Some of the best whale-watching resources may be found on social media platforms and websites. Searching crypto whale watch or Bitcoin whale watch is all it takes to locate them.
The Mystery Behind the Crypto Whales
There’s plenty of fish in the water and many available whales in the Bitcoin industry. However, we have no idea who the vast majority of them are. No one knows who created Bitcoin other than that it was created by someone going by the moniker of Satoshi Nakamoto.
So, like the deep blue water, the cryptocurrency market is full of mystery. Some whales have been identified, and many investors keep a watch on them.
He is a venture investor who has invested in firms such as Skype, Tesla, Robinhood, and Ancestry.com. Tim Draper is another Bitcoin whale. Draper made headlines for purchasing thousands of bitcoins that the federal government had confiscated in 2014.
Draper’s bitcoin holdings rapidly elevated him to the rank of whale in the Bitcoin market, and he has proceeded to collect more (along with other altcoins). He predicted that Bitcoin’s value would soar into the millions earlier this year.
The CEO of MicroStrategy, a Bitcoin-focused business analytics startup, is Michael Saylor. One of the most prominent Bitcoin advocates in recent years, Saylor has seen his company’s holdings soar to tens of millions of dollars.
Saylor has made Bitcoin investment a major role of MicroStrategy, which has even issued extra debt to obtain cash to purchase more cryptocurrencies. Because of this, Saylor and his business have grown to be Bitcoin’s sperm whales.
Many people think of whales as enormous animals, but they’re investors with large amounts of Bitcoins and have the power to influence the market. As expected, the identity and number of Bitcoin whales is a mystery, with a few notable exceptions.