A Deep Dive into Bitcoin Whales

You may have heard of cryptocurrency sales but have you heard of Bitcoin whales?

Bitcoin whales are anyone who owns and transfers over 5 million USD worth of cryptocurrency and some of their transactions have a large effect on the crypto markets.

“The original whales were the original guys who started Bitcoin.”

Last week one whale was accused of “manufacturing” a 600 dollar drop in the price of Bitcoin as they sold 215 million dollars of BTC and then bought the same amount back at the lower price, pocketing an estimated 10 million dollars in 90 minutes.

“It’s a sign of where the market is at” said Grant Colthup, CEO of Mine Digital, a Bitcoin and digital asset exchange.

“Five years ago the market would have fallen a lot more but it would have also been a lot harder for that person to buy it back,” Mr Colthup said.

Mr Colthup argues that Bitcoin whales aren’t a new phenomenon and that they’ve been around since the very beginning of Bitcoin.

“The original whales were the original guys who started Bitcoin and accumulated a lot of BTC when it was relatively easy to mine. Now as Bitcoin has been around for over 10 years, (whales) are now largely contained to the professional miners and also the professional traders and speculators”.

Bitcoin whales control 26% of the total market according to digital assets and regulation trade research magazine Diar, but these statistics are disputed by Whale Alert, one of fastest growing cryptocurrency monitoring websites.

“Those numbers are misleading. Most of the top owners are exchanges and they don’t own most of the bitcoin they have, but rather they are owned by their customers” said Frank, the creator of Whale Alert, who didn’t release his full name as his site also tracks stolen BTC and ETH.

“The market has to start somewhere and every day more people are flowing into crypto.”

Whale Alert tracks over 1.5 million transactions per hour thanks to the transparency of blockchain technology with the most interesting transactions being broadcast to its 83 thousand Twitter followers.

“When we started there were some sceptical and even hostile people, but now everyone seems to agree that more transparency is a good thing.” Said Frank.

Frank hopes that Whale Alert will expand and become the “all seeing eye” for cryptocurrency but he isn’t worried that Bitcoin whales with big money will take control of the market for their own gain.

“The market has to start somewhere and every day more people are flowing into crypto. Over time I suspect that most whales will become smaller and as cryptocurrencies become more evenly distributed and demand grows, the influence of whales will diminish. But you never know.”

Grant Colthup also agrees that Bitcoin whales are just part of the price discovery process in a free and unregulated market and over time their ability to manufacture price drops in the market will decrease.

“Ultimately what will happen will be the whale accounts evening out so they’ll be fewer very large ones and there will be more small to medium size accounts and as that happens their impact on the market will become less and less,” Mr Colthup said.

Further Reading:

https://diar.co/volume-3-issue-16/

https://bitcoinist.com/bitcoin-price-tumbles-below-8k-whales-manufacture-dump/

DATE POSTED
Wednesday 19th of June, 2019
PRODUCED BY

You may also like

Episodes