Whales are unique animals that are found in almost any area where there is an inequality in the distribution of resources. They are only called differently everywhere: monopolists, dominants, etc.
Whales appear at the stage of primary accumulation of capital and, with the normal development of the market, gradually become smaller.
In the cryptocurrency market, whales appeared along with Bitcoin, and among them are mainly:
Whales on the cryptocurrency market are people who have enough cryptocurrencies to influence its value if desired.
To determine a whale, you need to look at how many BTC it stores on its wallet. Although there is no clear figure here. The analysts indicate that the threshold of “whale” is dynamic and varies depending on the value of the cryptocurrency itself.
Therefore, holders with 10 BTC or more coins on the account can be considered whales at the moment. But, these are very small whales. While Ethereum owners will need at least a few hundred, or even thousands of ETH.
Note, that the largest transaction in the history of Bitcoin – 500,000 BTC, was carried out in 2011 when Mt. Gox was given for 1 Bitcoin $ 1.
Few people know there is BearWhale in the Bitcoin market, which looks something like this:
BearWhale first appeared in October 2014, when a warrant was placed on one of the exchanges to sell 30,000 BTC for $ 300, when the official rate fluctuated at around $ 320. BearWhale dipped the first cryptocurrency capitalization rate for two days.
In 2017, he published a post on Reddit, stating that he had made the wrong decision and was ready to buy again with Bitcoin. By the way, specifying that he bought a cue ball for another $ 8, his profit from the transaction was $ 292 on each coin with a total profit of $ 8,760,000.
Although BearWhale became the first registered whale, it did not act like a whale – in fact, it simply made a profit, draining the asset. Real whales are also whales because with each movement they create waves in the market that they use for their own benefit:
Pump – whale opens an order to buy a large amount of BTC, the market responds to increased demand and raises the price. The amount should be such that one trader can not close such an order, then the whale has time for its timely cancellation. While the market reacts again to cancellation, the insidious whale merges its BTC at an inflated price.
Dump – whale opens an order to sell a large number of BTC, but also such that it could not be bought by one trader. The market reacts, and the price sags, after which the whale is purchased by the asset at a cheaper cost, and the rate returns to normal over time.
All whales generate waves, but in the traditional financial sector, their influence is less, because the total market capitalization is immeasurably higher, and trillions of dollars had to be concentrated in one hand in order to achieve the same effect that the owner of 10,000 Bitcoins could create.
Since whales can cause storms in the already volatile cryptocurrency market with one fin movement, they are trying to closely monitor them. To do this, you can use such services as:
What is it for? In time, having received data on the movement of funds from the whale wallet, you can manage to protect your investments or even take advantage of the general disturbance of the market and make money.
From time to time, owners of whale wallets reveal their identities for one reason or another, sometimes they are immediately aware of them, sometimes they are suspected. Here are a couple of examples:
Zhoujianfu. This whale lost 100,000 BCH and 1,550 BTC after scammers duplicated his SIM card and gained access to his wallet. Zhoujianfu asked Reddit for help, confirming that he is the owner of the addresses from which the funds were transferred, but we will not show you the post because the author has already deleted it.
BCH address :qzumak2rvxksjgkjuxe2fe5jxatktlsnhy5sthr5p7
THIS IS REALLY BRUTAL pic.twitter.com/19XM3w5BL7
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) February 22, 2020
Joe007. This whale appeared in May 2020. Over the past six months, his Bitfinex account has occupied the first line in the performance rating of traders, and the profit for the same period amounted to more than $ 60 million. According to the Cointelegraph, Joey put down the BTC price in April 2020, which caused him to lose $ 20 million, was offended by Bitcoin, and closed his twitter account.
Jed McCaleb is also a whale, but Ripple. Leaving the post at Ripple, he retained the right to almost 6 billion tokens, and, according to WhaleAlert, from 2014 to 2019 he sold more than 1 billion.
If McCaleb did not bring down the XPR rate, it was only because an agreement was signed between him and the company to limit the sale of coins. True, it should end soon…
🐳🐳🐳 For the sake of transparency we took a closer look at several blockchains and their whales. In the first article of a series we discuss a famous Ripple whale. Find out how rich they really are on our Medium blog!https://t.co/je2py8vSkw
— Whale Alert (@whale_alert) February 6, 2020
Other alleged whales include the Winklevoss brothers, Tim Draper, and even the FBI with the Fed according to conspiratorial theories, though there is no information about their wallets, transactions, or current account status, so they are only conditional.
According to Bitinfocharts service, 42% of the total Bitcoin offer is stored at 2,145 addresses (this is slightly more than 0.01% of the total number of wallets). In monetary terms, this is more than $ 64 billion.
Another 43% falls on wallets from 10 to 1,000 BTC – which is also far from an average trading portfolio. Thus, 85% of Bitcoins owns only 0.57% of addresses. Recall that according to a study for 2018, 82% of earthly wealth is owned by 1% of the population.
And most addresses were created or withdrawn funds relatively recently, although Bitinfocharts does not demonstrate the amount of withdrawal.
Concentration is also confirmed by analysts. Glassnode reports that in April 2020, the concentration of Bitcoin whales is the highest in the last two years, and apparently, this was due to halving. An older Diar report analyzed the number of bitcoin wallets with a total of between 1,000 and 10,000 BTC in 2018-29.
Is it good or bad thing? Monopolists are dangerous for the market because they control it at their discretion. Therefore they violate the natural rate and reduce the functional value of cryptocurrencies for users. On the other hand, whales stabilize the market without giving assets to inexperienced retail traders, and while they are “silent”, volatility is reduced.