Key highlights
- Crypto whales are those investors in a crypto market who own cryptocurrency in bulk.
- A whale can influence the price movement of a cryptocurrency by manipulating its liquidity and demand.
- Michael Saylor, Elon Musk, and Winklevoss twins are some most famous bitcoin whales in the current times.
Crypto, which was nothing once, has become a whole ocean of networks and participants. This ocean of virtual assets has a unique ecosystem where everyone and everything has a specific role.
That’s why traders and investors consider various factors to decide their next moves in the market. One factor that most of them forget to consider is “Crypto whales”.
But who are crypto whales, and why are they so important?
Crypto Whales
A Crypto whale is a person or entity who owns a large amount of any cryptocurrency.
While the amount of crypto required to own for becoming a whale is not very clear, generally, it is considered at least 10% of a specific cryptocurrency. But this number varies with the cryptocurrencies and their supply.
For example, in the case of Bitcoin, a whale should hold at least 1,000 Bitcoins. Whereas in the case of SHIBA INU, this number can go into the billions.
Hence, any person or entity that holds enough cryptocurrency to affect its market supply in a significant way is a Crypto whale.
Here are some must-know things about Crypto whales
Who are the most giant Bitcoin whales?
MicroStrategy CEO Michael Saylor, Tesla CEO Elon Musk, Bitmain Technologies co-founder Micree Zhan, Tyler, and Cameron Winklevoss, Tim Draper, Matthew Roszak, and Galaxy digital are some most famous and the most giant bitcoin whales.
Interestingly, the founder of Bitcoin, an anonymous identity behind the name Satoshi Nakomoto is also said to own almost 1 million BTCs.
Collectively, all Bitcoin whales own almost 8.69 million BTC, which makes up over 45.6% of the total Bitcoin supply of 21 million.
How do whales influence the cryptocurrency market?
There are multiple ways through which whales affect the cryptocurrency market. However, in every way, they either use the FOMO of investors or create fake walls to gain more.
Let’s understand the ways with an example-
METHOD 1
Assume a whale that owns a large amount of cryptocurrency and wants to buy more. So, the whale will create a sell wall, which means he will place a big sell order of that crypto at a lower price than the market price. Say the current market price of a coin is $10. Then the whale might set the sell order at $8. It creates a fear among small investors that a big sell order means the network is dumping the coin so it might crash soon. Therefore, the small investors start selling their crypto at an even price lower than that set by the whale.
Once this panic brings the price of that crypto to the desired price of the whale, say $7, he would remove his sell order and buy more coins at the $7. This way, the whales become able to buy $10 coins at $7. Such accumulation techniques help whales to become stronger and have more control.
METHOD 2
It is the exact opposite of method 1. Say the market price of a coin is $10, but the whale wants to sell at $15. So, he would set a buy order of that crypto at a much higher price than the market price, say $20. Now, this creates illusional inflation in the price of that crypto because the other investors would think it is a profit-worthy time to buy that coin. They get influenced by the whales.
It creates a wave of FOMO (fear of missing out) in the small investors, so they start to buy more coins at a higher price than the market price. Hence, the price of that coin increases from its current price. When the price reaches the original desired price of the whale or higher, $15 in this case, the whale sells its crypto at a good profit.
Now, you must be wondering what if two or more whales are executing different methods at the same time frame. It can happen. Therefore, the whales are cooperative with each other so that their strategies can be executed as planned.
How to become a Crypto whale?
To become a crypto whale, one has to keep buying a large amount of cryptocurrency and HODL it regardless of market conditions. You can opt to buy the cryptocurrency when the market crashes to get them at a discounted price. Once you own a sufficient amount of cryptocurrency such that your buy and sell activity can influence the market, you will be considered a crypto whale.
How to track Crypto whales for free?
Whalemap is a free website where you can make your account and check the activities of bitcoin crypto whales. It provides well-detailed charts and parameters to give you the required details. However, understanding these charts can be challenging if you are unfamiliar with crypto analysis.
Some Telegram groups like- Whalebot alerts also exist that you can subscribe to get the latest info on big crypto transfers. It also provides other information like heat maps and charts.
Websites like ClankApp also track the real-time transactions of crypto whales. You can follow them on Twitter and Telegram or go to their website to check the significant price movements of various cryptocurrencies. Though it does not provide detailed charts, ClankApp displays details about the senders and receivers of such transactions.
Whale alert and Whale watcher are some other whale tracking platforms that work on a paid subscription model.
Why is it important to track whale activities?
Well, the answer is quite simple.
Assume you are in an ocean full of whales. Then why would it be important to look for whales? To survive, right?
The same applies to the crypto market. A crypto whale can manipulate whichever type of crypto coin or token he owns in bulk quantity. Since the crypto whales own a large share of a cryptocurrency, they can easily manipulate its liquidity and trading activities.
For instance, in 2021, Shiba Inu (SHIB)surged and reached a market cap of US$20 billion. Since it was an abnormal growth, various researchers studied its market activities. One of the biggest reasons for this surge was whales owning 70.52% of the SHIBA. These whales enjoyed a profit of 800% through their market-influencing tactics.
Hence, tracking the whale activities can help you avoid falling for market manipulations and artificial pumping of prices. Moreover, it helps small investors to plan their crypto trading activities in the right direction to achieve tremendous profit.
Are crypto whales good or bad?
Crypto whales can be both good and bad, depending on how they use their accumulations to affect the market. They can make or break the market through their methods. Any crypto with whale investors is less likely to come out as a Ponzi scheme because of having reliable long-term investors. But at the same time, the whales can also threaten the decentralized base of a cryptocurrency because they create an uneven distribution of power & price manipulation.
Luckily, many crypto exchanges prohibit manipulations by big players. Various platforms have also been launched to track the activities of whales. Therefore, it has become difficult for them to get away with manipulations. But having said that, it does not mean that the market is entirely safe from whale manipulations. But they do not happen as frequently as before.
Below are some quick tips you can follow to stay safe from whale manipulations-
One should always avoid the fear of missing out (FOMO) in the market while planning any crypto investment.
Following the rule of DYOR( Do your own research) and sticking to it also helps you avoid falling for lossful traps arranged by whales.
Try to find the logical explanation behind any price surge of cryptocurrencies and plan your next moves according to it only.
Conclusion
Whales are the master players of the crypto space. Small investors should give extra attention to the moves of these players. They should remember that what looks like a signal of optimism or pessimism can turn out as a false alarm anytime. Hence, incorporate the whale movements in your crypto analysis and stay updated.
