What Is a Crypto Whale?
A cryptocurrency whale, often known as a "crypto whale" or just a "whale," is a word used in the community to describe people or organizations that hold substantial quantities of cryptocurrencies. Cryptocurrency holdings by whales are sufficient to affect currency markets.
Being a whale in the bitcoin world is a subjective experience. The general consensus within the community seems to be that a whale is someone who owns a significant portion of the available cryptocurrency. Learn how the market and cryptocurrency investors may be impacted by these sizable accounts.
Key Takeaway
- A wallet address with a big amount of cryptocurrency is known as a "whale."
- Crypto whales are closely watched by the public and investors because they have a big impact on price changes.
- Whales can also cause an increase in price volatility.
- A few well-known bitcoin owners with significant holdings are Tyler and Cameron Winklevoss, Michael Saylor, and Brian Armstrong.
Understanding Crypto Whales
Because whales are enormous in comparison to the tiny fish in the bitcoin ocean, major cryptocurrency holders are also referred to as whales. According to BitInfoCharts, the top 100 wallets held more than 15% of all bitcoin in June 2023, and four bitcoin wallets held 2.81% of the total amount of bitcoin in circulation.
Even more concentrated is the meme coin that gained popularity, Dogecoin. In June 2023, there were over 70 billion Dogecoins in fourteen addresses, or about 75% of the total supply.
The crypto community and investors keep a careful eye on these big accounts. If any of the top 100 wallets make transactions, it is publicly announced on the Whale Alert website and on its X (formerly Twitter) account.
A Whale's Effect on Liquidity
Because they are prominent wallets and because of the concentration of wealth, particularly if it remains in an account untouched, whales can be problematic for cryptocurrencies. When coins are held in an account rather than being spent, it reduces the liquidity of that particular cryptocurrency because there are less coins available.
A Whale's Effect on Price
Whales are another factor that can enhance price volatility, particularly when they move a significant amount of cryptocurrency in a single transaction. For instance, if a user attempts to exchange their bitcoin for fiat currency and other market participants learn about the transaction, the lack of liquidity and huge transaction size put downward pressure on the price of bitcoin. When whales sell, other investors are on high alert, looking for signs that they are "dumping" their assets.
The average quantity of a certain cryptocurrency that is deposited into exchanges, or the exchange inflow mean, is a common indicator that cryptocurrency investors keep an eye out for. If there are a lot of whales utilizing the exchange and the mean quantity of coins per transaction increases above 2.0, whales are likely to start dumping.
In addition to the inflow mean, another factor that affects pricing is publicity surrounding a specific whale's transaction. after huge cryptocurrency transactions are made, the price of bitcoin only reacts after Whale Alert makes them public on X.
What Crypto Whales Mean to Investors
Anyone with a significant bitcoin holdings has a variety of options for moving their assets. The fact that there is movement should not be interpreted as a whale selling off their assets. They can be exchanging wallets, making a significant purchase, or both.
To avoid calling attention to themselves, whales may try to sell their assets for smaller sums over a longer period of time. They may result in market distortions that cause prices to fluctuate erratically. Investors keep an eye on the known whale addresses in order to count and value the transactions..
Who Are the Big Whales in Crypto?
Michael Saylor, Brian Armstrong, Tyler and Cameron Winklevoss, and other well-known cryptocurrency owners who control significant amounts of the digital currency are just a few examples.
What Does "Whale" Mean in Crypto?
A person who owns a significant quantity of a certain cryptocurrency is known as a whale. It might also refer to a person with substantial holdings of various kinds.
Do Whales Manipulate Crypto?
Investors carefully monitor the actions done by crypto whales. It's difficult to determine whether they do it on purpose, but they have the power to influence price movements because of the interest other people have in their assets.
How Much Is a Crypto Whale?
The definition varies by coin and is arbitrary. In general, whales have a lot of coins available for a particular currency.
The Bottom Line
If you're a crypto investor, it's a good idea to pay attention to what the whales are doing, but movement doesn't always imply you should fear. Many whales are entrepreneurs who made significant cryptocurrency investments. If you want to watch whales, these might be the ones to pay attention to. To follow whale transactions and their values, keep an eye on the addresses that are known to be whales. They are made known to the public on the X account and the Whale Alert website.