Bitcoin whales actually stabilize the market according to a new report. Indeed, Chainalysis has released a report entitled “The Not-So-Killer Whales of Bitcoin” which aims to debunk what much of the cryptocurrency community believes to be true about Bitcoin Whales. Namely, whales may actually be stabilizing the market rather than the opposite. The public has been made to fear Bitcoin whales, operating on the notion that they make moves selfishly or maliciously at the rest of the market’s expense. Though, this report’s conclusions beg to differ. Chainalysis’ intensive analysis looks to the 32 largest Bitcoin whales to gather its data.
What Are Bitcoin Whales?
A Bitcoin whale is a nickname allotted to an individual by the Bitcoin community. Whales are large-scale investors who make significant moves within the Bitcoin market. Because Bitcoin whales make massive investments, trades, and sales, they have the potential to impact the market radically.
Not only can they have an impact through their organic investment decisions, but they can also purposefully manipulate markets because of the large quantities of Bitcoin they possess. There has been speculation in the past that the market’s more significant shifts have been at the hands of Bitcoin whales. Furthermore, products of purposeful manipulation. Additionally, the fact that just a few Bitcoin whales can monopolize the majority of Bitcoins in circulation has been a cause for concern for the rest of the Bitcoin community. Naturally, Bitcoin investors are wary of Bitcoin whales and often fearful of their next big moves. Though, Chainalysis’ “The Not-So-Killer Whales of Bitcoin” report proves that these fears may be unfounded.
Bitcoin Whales Actually Stabilize Market According To A New Report
After carefully analyzing Bitcoin’s 32 largest investors, the report has concluded that Bitcoin whales may actually play to the market’s benefit.
Furthermore, they appear to be stabilizing the market rather than destabilizing it, as many individuals have assumed in the past. The report shows that the whales control roughly 1 million Bitcoins, of around USD 6.3 billion. Among the whales are four basic classifications of investors:
Miners/Early Adopters: 33.1%
Miners/early adopters are a group with incredibly low trade activity. Many of these investors made significant moves back in 2016/17 as prices were on the rise. Many assume that these individuals are now very wealthy.
These whales are active traders, most of whom didn’t get into the market until 2017.
Lost whales are unique because they are not exactly individuals. Rather, they are wallets for which the owner has lost the key. These wallets are inaccessible and hold large amounts of cryptocurrency. As such, there have been no transactions from these wallets since 2011. To understand these circumstances, it is beneficial to understand how crypto wallet recovery works.
The smallest group of Bitcoin whales is made-up of three wallets, all of which connected to criminal Bitcoin behavior.
Because three out of these four categories of whales are virtually inactive, the traders are the only ones actively buying and selling in the Bitcoin market. Therefore, if there were fear or speculation regarding market manipulation, we would need to look to the traders who make up about one-third of the total whale assets.
Are Trading Bitcoin Whales Promoting Price Volatility?
After careful examination, the report concludes that the whales are actually operating in a manner which appears to stabilize the market. In fact, during the most significant price declines, the whales were actually making large Bitcoin purchases. Therefore, the whales were buying during a decline and, in turn, stabilizing the market.
Bitcoin whales inherently generate fear among investors as no one can predict what their next move will be. Though, the past seems to indicate that the Bitcoin’s current whales may not have malicious intent.