Bitcoin whales are known to anyone interested in the cryptocurrency market. These are known as the world’s largest cryptocurrency players. It is also known that because of their size, they have the ability to manipulate the price of BTC. But the truth is that they can not only manipulate, they can also anticipate prices.
By 2018, they controlled a third of the market with $ 37.5 billion. In 2019, Bitcoin whales owned a fifth of all BTCs, according to Chainalysis.
This concentration of wealth implies that there is a risk of volatility in the Bitcoin market as doing business has a large impact on price for a small number of people, said Philip Gradwell, chief economist at Chainalysis.
Experts warn that the lack of regulation and the existence of informal OTC markets offer opportunities to manipulate the market. This also induces them to be able to anticipate the price of Bitcoin.
How is whale bitcoin property distributed?
Bitcoin whales are estimated to hold approximately 25.78% of the total amount of Bitcoin available. However, they correspond to 0.01% of the available addresses.
Therefore, there is a high concentration of BTC possession in a few hands or bitcoin whales. This is how we can see it in the following diagrams. The upper one relates to the distribution of addresses and the lower one to the distribution of BTC tokens.
It should be noted that there are different types of Bitcoin whales: “criminal whales”, “whales with early adoption” and “commercial whales”.
Criminals are the ones involved in criminal groups, the latter are the ones who bought BTC when it was very cheap and have accumulated over time. After all, the commercials are commercials that sold part of their inventory during the BTC bull rallies.
More facts about whales
However, according to Chainalysis, stocks of early adoptive whales have decreased by 4% by 2019. The result is that of all the bitcoin whales in circulation that adopt early, today are only about 5% compared to the initial 9%.
That said, over time, they became commercial Bitcoin whales. For this company, “commercial whales” have the most positive effect of all types of whales because they have a “stabilizing effect”.
This does not mean that they have lost their manipulative power, but instead of waiting for long-term speculation, they inject their market-stored BTC when they see large profit margins.
However, we have never seen the real impact of such a massive sale. If really strong sell orders of this magnitude came into play, the actual outcome would be difficult to determine. One aspect of this scenario is that new currencies are first introduced in exchanges.
We know that up to 2.5 million BTC exchanges change hands every day, but often these are the same currencies that are traded over and over again. Most commercial whales sell Bitcoin with the expectation of buying it back cheaper – increasing their holdings and further limiting the risk of other species of whales.
Therefore, whales can anticipate the price of Bitcoin as they analyze the market like many investors, but can increase and decrease it at any time using various strategies.