The whales, in essence, refer to people or companies that hold large amounts of cryptocurrency. You might wonder how large it is. Well, large enough to pretty much flip the value of one currency upside down. They are so influential that they can increase the volatility of the market, decrease its liquidity, or even both.
Whales: The Big Fish in The Cryptocurrency Ocean
Thanks to the tremendous rise in the value of Bitcoins, the cryptocurrency market has gained a ton of traction from investors and fortune seekers alike over the past year. As many may already know, the risks you take when investing in cryptocurrency are high but the returns on investments could also be astronomical. That’s how it goes in the market.
Today, in various cryptocurrency discussion forums, we can see a lot of buzz around the people who traders refer to as “Whales”. Why are they being compared to these majestic sea creatures? Well, it might not be that hard to guess.
Whales’ effect on the market
Whales are so huge that when they move around in the ocean, they can cause waves that could disrupt the movement of other smaller sea creatures. In a similar vein, the “Bitcoin Whales” can also make or break your cryptocurrency portfolio just by how they behave in the market.
The whales, in essence, refer to people or companies that hold large amounts of cryptocurrency (mainly bitcoins). You might wonder how large it is. Well, large enough to pretty much flip the value of one currency upside down. They are so influential that they can increase the volatility of the market, decrease its liquidity, or even both.
Satoshi, the founder of bitcoin, and Tyler and Cameron Winklevoss are some of the very notable bitcoin whales. In early 2021, data from BitInfoCharts shows that three of the largest bitcoin holders owned more than 7% of all bitcoins in the world, valued at roughly around $75 billion. And if we take a look at the bigger picture, the top 100 bitcoin wallets held more than ⅓ of the world’s bitcoin – valued at over $340 billion.
Even if the whales try to sell their digital assets little by little to avoid people noticing, they can still cause significant disruptions to the market, often bringing the cryptocurrency prices up or down.
If you’re looking to invest in cryptocurrency, you must keep an eye on your graphs. The market never sleeps and you can never be too careful