A crypto whale refers to an individual, group of people, entity, or blockchain wallet that holds enormous amounts of cryptocurrency. This term is analogous to sea whales, the ocean's giant creatures. So, crypto whales are the largest crypto holders in the market. And just like real whales, their crypto counterparts can create big waves, causing a ripple effect among traders and small crypto holders (analogously referred to as crypto minnows).
At what point a crypto holder attains whale status is subjective. But in most cases, the crypto community agrees that a whale holds a large percentage of the available supply of a specific coin. Generally, whales account for at least 10% of the total supply of a cryptocurrency. Whales can significantly influence price movements with such massive amounts of crypto.
Who Are the Bitcoin Whales?
A Bitcoin whale is a wallet address that holds more than 1,000 BTC. But there are other levels in this ‘scale.’ A humpback is a crypto holder with more than 5,000 BTC. A shark holds between 500 BTC and 1,000 BTC, whereas a dolphin has between 100 BTC and 500 BTC. In the lower rank are a fish with 50 BTC to 100 BTC, and an octopus with 10 BTC to 50 BTC. A crab holds between 1 BTC and 10 BTC, and a shrimp has less than 1 BTC.
Some well-known Bitcoin whales include Pantera Capital and Fortress Investment Group. But the BTC holdings of those whales would pale in comparison to Satoshi Nakamoto’s holdings. Bitcoin's creator (or creators) is believed to hold over one million BTC. Another prominent whale (rather a humpback) is Roger Ver, who owns 300,000 BTC. Also, the Winkelvoss twins held 1% of all Bitcoin at one point.
What Is a Crypto Whale in Trading?
A whale in trading is a crypto whale that puts to work their cryptocurrency holding in big-time day trades, shorts, longs, or long-term investments.
The Importance of Crypto Whales for Investors
Whales can produce market distortion, unexpectedly sending a coin’s price up or down. This phenomenon is possible because the prices of most cryptocurrencies are driven by supply and demand. If whales keep a considerable percentage of a coin’s supply out of circulation, then the coin’s price increases. Likewise, if many coins are abruptly liquidated, the price drops. That is why investors keep an eye on known whale addresses to know the details of their transactions.
How to Become a Crypto Whale?
Becoming a whale is straightforward; you must accumulate and stack cryptocurrencies. It usually takes time. So, if you plan to become a whale, you should start purchasing crypto now. The current crypto winter represents an excellent opportunity to buy and begin accumulating crypto. You can use LetsExchange.io to purchase cryptocurrencies at competitive rates.
The Impact of Crypto Whales on the Cryptocurrency Market
As mentioned, crypto whales can manipulate the market in their favor—no wonder the crypto community and investors are continuously monitoring the moves of the top 100 wallets. When a transaction involving any of these wallets is detected, it is publicly announced via a Whale Alert website and Twitter. Crypto whales can mainly impact the liquidity and price of particular coins in the crypto market.
Liquidity
Whales can lower a specific cryptocurrency’s liquidity by keeping many coins out of circulation, mainly if the coins sit unmoved in a wallet. Such a situation can be a problem for traders and exchanges.
Price
Whales can also be responsible for price volatility increases, particularly when they move a large amount of crypto in a single transaction. Hence, when whales sell their holdings, investors go on high alert.
Conclusion
Crypto whales hold large amounts of cryptocurrencies, which is why they are pretty influential in the market. They can increase or decrease coin prices, creating bull and bear markets. As a crypto investor, you do not need to whale watch. After all, it is in crypto whales' interest to maintain their coins' value high. So, keep an eye on the market in general to devise your investment or trading strategy. This way, you can avoid market manipulation by whales.
FAQ
How much cryptocurrency do you need to become a whale?
A lot! While the definition of a whale is subjective, you need to hold a considerable percentage of the supply of a specific coin to be considered a whale. If we talk about Bitcoin, you need to hold more than 1,000 BTC to be a Bitcoin whale.
What crypto are whales buying?
Whales are more interested in cryptocurrencies that can increase their value in the long run, like Bitcoin, Ethereum, and the like.
How many crypto whales are there?
There are approximately 1,000 Bitcoin whales and 132 Ethereum whales.
What are crypto whales doing?
They usually buy cryptocurrencies on an exchange and move them into their wallets in large volumes. Such transactions can lead to bullish price action for a particular coin. But in other cases, whales may choose not to disturb the markets by buying or selling on an exchange.
How do you know what crypto whales are holding?
Blockchains are usually transparent. Hence, crypto whale tracker tools, apps that track and analyze crypto whale transactions, can report on every transaction made by a crypto whale. This way, we can know what crypto whales are holding.
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