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18 May 2020
4 min read

Crypto Whales: Investors That Shake The Blockchain

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Written by OspreyFX News Team
*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.

Crypto Whales: Big-Time Investors That Can Shake The Blockchain

There were over 42 million bitcoin wallets by the end of 2019 but the large majority can be described as small fry in relative terms. However, hidden inconspicuously in the depths of the crypto ocean lie the actual movers and shakers of the crypto world. Who are they and what impact do they have in the crypto world? Let’s dive right in.

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Characteristics of a Crypto Whale

The key players of the crypto world are known as crypto whales. In a nutshell, a crypto whale is an individual, group or entity that holds a (very) large number of crypto coins. This is at times, used alongside the term bitcoin whale which describes a big bitcoin holder. There are no official thresholds that indicate how many coins are required for someone to be considered a whale. However, there is a consensus that the minimum is at least around 1,000 BTC but it can go up to staggering quantities of 1 million BTC or more. Someone who holds a figure that is closer to the 1,000 BTC  holds a small whale status and conversely those with a large amount are known as mega whales.

ETH whales and BCH whales are also other types of crypto whales, however, BTC whales are typically those that are more predominantly discussed.

Crypto Whales


The Kings of the Ecosystem

Some believe that bitcoin whales hold around 42.1% of the total bitcoin supply. That’s almost half of the bitcoin cake that’s cut up into very large pieces and shared only among a few kingpins. Movements on the Ethereum front have also recently indicated an increased concentration of ETH in the top 100 wallets which hold 25% of the coin’s supply. So, what does this signify for the crypto ecosystem? Does it mean that these kingpins are able to shape events according to their agenda? Many believe that this is the case.

The core ethos of the blockchain mechanism is that no single entity is controlling transactions and movement, but rather there’s a distribution of power among different members of the community. This means that at no point can any one person or entity pull the (crypto) plug off. Contrary to traditional financial frameworks, this system ensures that no government or bank is able to control the system.

However, do these powerful whales threaten this democratic distribution of power? Let’s look at a well-known example – the Mt. Gox Whale episode. In a nutshell, this Japanese crypto exchange had responsibility for more than 70% of all bitcoin transactions. The exchange declared bankruptcy and later, the selling-off of massive crypto coin quantities ensued between December 2017 and February 2018. This period was (perhaps coincidentally) characterized by a slump in the price of bitcoin.

The trustee responsible for the sale insisted that there was no correlation between the two events. However, analysts and traders everywhere expressed their concerns. As this type of crypto selling could create a ripple wave across the crypto market.

A Whale of a Time?

The recent bitcoin halving event was preceded by a substantial price increase which in turn provided the ideal conditions for whales to mass dump bitcoins and benefit from a great selling price.

Meanwhile, it was also recently reported that ether whales may also be seeking to leave ether and profit from the bullish sentiment in the bitcoin ecosystem.

The beauty of the crypto market is that it is still in its infancy and so it is interesting to see which twists and turns wait around the corner. Will the crypto whales remain a permanent fixture of the crypto scene? Will their actions shape the market? Only time will tell. In the meantime, don’t let the big whales scare you from the taking a dip in the water. Take it from us – the crypto ocean can be a lot of fun, for mega whales and small fish alike.