Who are Crypto Whales?

Who are Crypto Whales and why are they not good for Cryptocurrencies? This article will discuss Crypto Whales and their impact on the free market.

Who are Crypto Whales?

Crypto whales are any individuals or organisation that has a lot of Cryptocurrencies. The ownership of a lot of Cryptocurrencies isn’t an inherently bad thing however, having a lot of particular Cryptocurrency gives these whales power to manipulate the token’s value. Whales aren’t anything official and there’s no actual way to mark an individual or an organisation a whale. However, ownership of more than 1000 BTC is generally regarded as being a whale. For coins other than Bitcoin, these numbers can be higher depending on the market cap of that Cryptocurrency.

How Whales manipulate the market?

Whales hold large enough reserves to be capable of manipulation of the Crypto market. Whales can easily plummet or inflate the prices of Cryptocurrencies effortlessly. By selling just a portion of their coins, they can make the coin tumble down. The same happens when they purchase Crypto coins.

As Whales hold a large number of coins, they can sell their belongings for a prolonged duration which will keep the market low for a longer duration of time. They can produce market distortions in more ways. If a whale decides to sell their belongings in a large transaction, the market price will drop for that coin which will intimidate smaller investors who’ll also sell their coins. Consequently, his will create a butterfly effect where small Investors have to bear heavy losses.

Data on Crypto Whales

One report suggested that almost 40% of all Bitcoins are held by only 1000 addresses. Furthermore, it’s been seen that the top 1/5th of Bitcoin Investors hold about 4/5th of all Bitcoins. BitInfoCharts in a report claimed that more than 3% of all the Bitcoin that is in circulation was under the possession of the biggest 3 Whales. This value amounts to about $27,361,662,597 as per a report by BitInfoCharts.

The presence of Whales in the Crypto domain has shown its detrimental effects. The accumulation of wealth at such an enormous scale is never good. This has really increased the volatility of coins and is essentially against the vision that drove the development of Cryptocurrencies.

Conclusion

We learnt about Crypto Whales and who they are. We also learn about their tactics and how they manipulate the market. Hopefully, you liked reading this article. If you want to read more like it, do visit our website for more.

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