Perhaps you have noticed how blue whales rule in the oceans. Some studies actually show that other whales can sense them up to 1,600 km away, given the right oceanic conditions. It is almost a similar scenario in the crypto industry. Crypto whales are known for holding large amounts of crypto enough to influence currency markets.
Especially when it comes to Bitcoin price assessment, the role of whales cannot be overstated. And thanks to blockchain’s transparency, you can know the addresses behind these prominent figures and tell the causes and predictions of their movements. You might have heard about whale watchers, who are always on watch to see how the whales move before sharing the information with the broader industry. Read on to learn more about these intriguing figures.
Historical Examples of Whale Influence
About a decade ago, a single holder, often referred to as Bitcoin Whale, implemented a major sell-off of the currency, which saw the crypto community grappling with lower Bitcoin prices. This not only had direct financial consequences but also affected investor confidence. Three years after this event, Ethereum went through almost a similar experience. After the currency’s infrastructure faced the DAO hack, Ethereum Classic emerged, which attracted the attention of several whales.
A year later, the Initial Coin Offering began to proliferate – which saw whales actively participate during token sales. Such instances have sparked critical discussions on various topics like potential market manipulation. In 2018, after Ripple introduced an escrow system to control how XRP was released into circulation, notable whale transactions were identified. Another influence came in 2020 when DeFi saw whales participating in yield farming and liquidity provision.
As of March 2024, three Bitcoin wallets accounted for almost three percent of all the currency’s circulation. On top of that, the top 110 wallets accounted for over 15% of the currency.
Individual Bitcoin Whales
At the moment, there is no set amount that determines whether or not an entity has achieved the whale status. All that most individuals agree to is one must own a considerable amount of circulating crypto to qualify for this rank. And while some whales operate anonymously others are well known.
Satoshi Nakamoto is the first whale we take a look at. He is the mysterious founder of Bitcoin and is believed to have about 1.1 million BTC. The founder made a significant portion of his wealth during the early days of mining where he is believed to have mined more than 54,316 blocks (each block was about 50 BTC before the first halving event).
You will be surprised to discover that of all of Satoshi’s coins, those that are distributed across 22,000 wallets are yet to be spent. This means that if they were to be transferred, Bitcoin’s market value would be significantly affected.
There is More
If you are a tech enthusiast, you probably have heard of the Winklevoss Twins, who first came to the tech scene after launching HavardConnection. This technology set the ground for their venture into digital currencies. The twins focused on crypto after a high-profile battle with Mark Zuckerberg, whom they believed stole their idea for what became Facebook. By 2017, they were ranked as the first Bitcoin billionaires after acquiring about 1% of all Bitcoin in the world. Currently, they own about 70,000 Bitcoins.
Tim Draper is another renowned figure in crypto who made a name for himself after purchasing about 29,500 BTC in 2014 at a US Marshals auction. This was after an unfortunate event where he lost 40,000 coins that he had initially purchased at the Mt Gox Exchange. Following closely at Draper’s back is Michael Sayor, who has accumulated about 17,732 BTC.
Looking at the Effects of Whales
As you can see, whales hold significant amounts in their wallets, and this can affect a currency’s liquidity. For instance, if, say, Draper retains most of his coins in his account, Bitcoin will likely become less liquid as few coins will be available. As if that is not enough, if he decides to move a large quantity in one transaction, it can increase price volatility.
What could be the impact of such scenarios? A downward pressure on the currency’s price, especially if the owner attempts to dispose of the currency for fiat currencies. A common indicator investors will often look for when whales sell is the exchange inflow mean. Most individuals believe that if this value rises above 2.0, whales are likely to begin dumping.
In addition to the inflow mean value, the publicity that goes into a specific whale’s transaction can affect the price. Particularly when announcements about large transactions are done on X by Whale Alert or news outlets, Bitcoin prices tend to respond.
Parting Shot
It’s always a good idea to pay close attention to the behaviors of whales and other trends as a way of enhancing your decision-making. These figures hold significant amounts of crypto, and any decision they make can greatly affect the market. Thanks to X alerts, you now access such kinds of information with just a simple touch of a button.
