The crypto market is very diverse — you can join it no matter how much you can afford to invest in digital coins. As with any other market, there are some big players, whose impact on the industry is really considerable, as they can affect entire blockchains under certain circumstances. Such players are called crypto whales. Let’s find out a bit more about this concept and its significance in the industry.
The term crypto whale is related not only to individual investors but to enterprises as well. To be called a whale, one needs to own a big number of digital coins. As a rule, this quantity should be big enough to affect the price of selling and buying coins. Although crypto projects try to avoid such tendencies by introducing decentralization measures, the influence of participants owning enormous quantities remains important.
Plus, crypto whales usually avoid traditional crypto trading, common among average market participants. They prefer so-called over-the-counter crypto trading. This is a special approach used to trade beyond the marketplaces of regular exchanges. This way, such engage in private deals of virtual coins.
The influence of the whales is especially significant in proof-of-stake networks such as Ethereum, Cardano, Solana, Polygon, and many others. This is driven by the technical peculiarity of such protocols that provides holders with bigger amounts of staked funds with the possibility to gain more voting rights.
Do they bring any disadvantages?
On the one hand, the existence of big holders can facilitate the growth of the network and improve its performance over some time. However, on the other hand, such participants may have enough power to dump the orders and take control of supply and demand. As a result, the con’s price can start moving down, which can lead to chaotic decisions taken by holders of smaller quantities of coins. Such actions might be manipulative, as they help whales to accumulate more coins at a now lower price. The fact that the crypto market is decentralized and anonymous can make everything even more volatile.
Biggest BTC whales
As we’ve mentioned, proof-of-stake networks can be prone to whales because of the risk of centralization. What about Bitcoin — the biggest virtual coin that runs on a proof-of-work consensus algorithm?
In order to be considered a Bitcoin whale, a holder needs to own at least 1,000 bitcoins. Let’s get acquainted with the top-3 of the biggest Bitcoin holders.
Tim Draper is one of the most prominent world investors. Obviously, he couldn’t miss the opportunity of taking advantage of the most valuable digital currency.
Tim Draper was one of the enthusiasts who wasn’t going to mock Bitcoin in its early years. In 2014, the investor bought 30,000 BTC coins. In 2014 he made a small investment into what is now the biggest decentralized asset, and you can count on your own how much value Tim Draper stores in Bitcoin.
Similar to Tim Draper, Barry Silber managed to foresee the prospects of cryptocurrency long before it became mainstream. However, unlike Tim Draper, he is more focused on the digital market, as he even founded Digital Currency Group in 2013. This is a big holding that invests not only in Bitcoin but in other promising projects as well. As for BTC, the company has already managed to accumulate values worth $28 billion.
Elon Musk is one of the most active and influential crypto enthusiasts in the world. No wonder, his company is engaged in Bitcoin investments. Currently, the BTC amounts held by Tesla exceed $280 million. Just a year ago, this quantity used to exceed the mark of $1 billion. Nevertheless, even with current holdings, Tesla can be listed in the category of BTC whales.
Do you need to follow them?
In the cryptocurrency market, there’s a popular strategy called whale watching. This refers to following the crypto whale’s actions. Why might it be useful for average holders? Thanks to this move, it’s possible to predict the following actions and whale and avoid potential chaos. This helps to prevent losses and facilitate gains in the cryptocurrency market.
In general, this approach is quite useful if you aim to stay tuned to everything that is going on in the industry. Whales influence even such huge projects as Bitcoin and Ethereum, and if there are whales in smaller projects, it’s just vital to be ready that they take different actions and respond to them accordingly.
In conclusion, the cryptocurrency market has some big players whose actions are important and must be taken into consideration by smaller investors. Whales can speculate the prices and their advantage, which is dangerous, but this doesn’t mean small investors cannot respond to such actions reasonably. Track the activity of whales and follow the latest news to prevent losses and generate profits!