In the real world, whales are the enormous creatures living in the seas. The crypto world is quite similar to our world. Crypto Whales are persons or entities who hoard or own a significant amount of crypto. For instance, a BTC whale is one wallet address containing more than 1000 BTC. On the other hand, individuals who own many cryptos are known as crypto whales.
The popularity of crypto whales has grown significantly over time, especially concerning BTC. In 2017, one BTC whale forced the token’s price to $20,000. In October 2020, the largest BTC was made when a user moved more than $1.1 billion (£820,000) of Bitcoin. Despite these transactions not being shared, they have begun occurring in recent times.
Crypto Whales earn money while still manipulating how other crypto traders trade. Therefore, it is very vital to monitor the activities of crypto whales.
How Crypto Whale Takes Advantage of Cryptocurrency
Generally, crypto whales make a sell offer of crypto that is usually lower than all the orders in the market. This price drop results in an alarm chain response, and in the end, the market becomes more unstable. After enough panic has been caused, the whales withdraw their massive sell orders, and market stability is re-established. This way, the coin’s price arrives just where the crypto whales wanted it.
Hence, they can accumulate more coins at their intended price. At this point, the crypto whales initiate the next phase known as a sale wall.
It is challenging for you to trace crypto owners as they were made with anonymity as the critical feature. However, by analysing the data on the blockchain, you might be able to identify individuals or organisations that own a significant number of coins.
The Importance of Crypto Whales
Generally, the price and value of crypto are driven by two core factors; supply and demand. This means that when a significant number of coins are withheld from circulating in the market, the price of the withheld coin rises in the market. In return, if many coins are liquidated, their value will plunge. This therefore means that crypto whales have an extraordinary power to influence the crypto market to their gain.
For instance, if a crypto whale wishes to buy additional coins at a lower price, they release a massive number of the coins in the market, effectively increasing the coin’s liquidity at a lower price. From here, the whale can purchase the released coins and more at a lower price.
The crypto whale might hold on to this coin. Therefore, cutting supply and increasing the value. This is a simple but straightforward illustration of the power possessed by crypto whales over the market.
BTC Crypto Whales examples
Despite BTC being pseudonymous, the ledger stores all the transactions and addresses. Because of this, we might make some informed guesses concerning a few BTC whales’ identities.
The following are some of the educated guesses;
- Satoshi Nakamoto
- Barry Silbert
- Tim Draper
- Winklevoss Twins.
Most people will advise you against whale watching; besides, the main interest of whales is to ensure that their coins attain the highest possible value. It will be a significant loss if you adhere to all crypto waves. The best strategy to evade manipulation by these whales is to have a deeper understanding of market trends. Knowing when to exit or stay in a market will reduce the number of mistakes you might commit in a long-lasting investment.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
