Crypto Whale: What Is It?
If you follow the cryptocurrency markets, you have probably heard the term "crypto whale". They are prominent players in the crypto world known to buy enormous amounts of a particular coin, often altering the market.
Read on to see how crypto whales affect the market.
What is a Crypto Whale?
A whale is someone with a significant quantity of money to invest in the cryptocurrency markets. They earned the name because a whale is the largest creature in the ocean.
Whales can be individuals, groups, or companies, such as hedge funds or trusts.
Who is the Biggest Crypto Whale?
The following are some of the publicly-known holders of large amounts of cryptocurrency: • Sam Bankman-Fried • Micheal Saylor • Brian Armstrong • Cameron and Tyler Winklevoss • Roger Ver
Each name on this list plays a significant role in the crypto markets, especially in Bitcoin.
Crypto Whale Effect on Price
Whales can also increase price volatility, particularly when they move a significant amount of cryptocurrency in a single transaction.
For example, when an owner tries to sell their Bitcoin for fiat currency, the lack of liquidity and big transaction size put downward pressure on Bitcoin’s price because other market players see the transaction. Other investors are on high alert when whales sell, looking for signs that the whales are “dumping” their holdings.
The exchange inflow, or the average quantity of a particular cryptocurrency being deposited into exchanges, is a common sign that crypto-investors look for.
When a crypto whale dumps, the large volume can impact value on its own. However, it also sparks fear among other, smaller investors who follow suit, sell up, and further drive down prices.
Crypto Whale Impact on the Crypto Market
Crypto whale activity has the potential to have a significant impact on cryptocurrency markets. This includes individual cryptocurrency prices and market capitalisation.
This is because whales frequently conduct trades worth tens or hundreds of millions of dollars. These large sell or purchase orders can cause considerable price fluctuations. For example, when a large buy order is placed, the price of a particular cryptocurrency can skyrocket since it signals to the market that the asset is in more demand.
When whales place a large sell order, the price can move in the opposite direction because the market receives the contrary signal, and the asset appears to be unloaded.
When a crypto whale makes large buys or sells, they can influence the market, resulting in a cascade of buy or sell orders.
About 1,000 people are thought to own nearly 40% of all Bitcoins. With so few people holding so much BTC, any substantial buy or sale from these mega-investors might swing the market in either direction. It may affect the market negatively or positively, depending on the signal received.
Whales are an important element of the cryptocurrency ecosystem to understand. Their actions can induce price fluctuations up or down, resulting in dramatic market reactions. Some whales engage in high-volume trades regularly, while others merely amass and hoard as much as possible.
If cryptocurrencies continue to expand and become a more powerful asset class, the whales will become much wealthier and control an even larger share of the crypto sea.
It can confidently be stated that the whales control the crypto market, as their decisions influence the market. When they make huge investments, prices rise, and once they dump, due to the large amount removed, the market dumps as well.
As Bitcoin significantly influences other cryptocurrencies (altcoins), a BTC crypto whale has influence beyond their chosen coin.
Influencing the value of Bitcoin, up or down, sends ripples throughout the crypto market.
Author: Brendan Beeken
Moni Talks Founder and Chairman Brendan Beeken is an entrepreneur, commercial strategist, investor, and philanthropist. He writes on a wide range of subjects, including cryptocurrency, decentralised finance, blockchain, business advice, and professional wellbeing, for news and business websites, as well as Latest Moni and his personal site, brendanbeeken.com. Brendan draws from his own research and more than two decades of personal experience in business to offer a unique insight, perspective, and commentary on diverse subjects. He is passionate about making the cryptocurrency space more accessible and encouraging safer and more responsible trading and investing. Brendan's LinkTree is https://linktr.ee/brendanbeeken.