BTC Whales Turns Friends to Crypto Markets as they Soak in Volatility from the Markets

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BTC Whales Turns Friends to Crypto Markets as they Soak in Volatility from the Markets

A presence of BTC whale in the crypto market is always associated with either huge pumps or dumps depending on the whale does. Every time a whale move is associated with price manipulation. Well, this usual notion regarding BTC whales is about to change as according to new data from Chainalysis, has revealed that bitcoin whales are a surprisingly heterogeneous group of coin holders who might be doing more good than harm to the market.    

BTC Whales more friends than foes

It’s not uncommon that a crypto enthusiast comes across a fall in crypto markets being associated with a whale movement. Whales are always dubbed as villains which manipulate digital asset whenever there is a fall. But if a recent report from Chainalysis is to be believed, these bitcoin whales are a mainly a mixed group of people, with more than half of them not being active traders. The report also puts forward some interesting facts that while the few amongst them who trade have the ability to influence a deep in the market, they tend to buy, not sell during a price decline. Another point that is worthy of making note is the fact that these large holders, being professionals, use the OTC trading platforms that are able to manage the volumes of their transactions with moderate price disruption rather than an exchange.

The report states that the 32 largest bitcoin wallets not on exchanges as at August 2018 account for about one million BTC, or about $6.3 billion. These wallets are then categorizes based on the traits they exhibit, classifying them as traders, miners or early adopters, lost and criminals. Of this number, nine wallets control over 332,000 BTC worth a little above $2 billion and account for about a third of total whale shares. This group, the traders are mostly new arrivals in the market joining the bitcoin world in 2017.

The next group, the miners, were the second largest group and have been in the market even before the ‘traders’. Accounting for a total of 332,000 coins worth a little above $2 billion, the “miners” group comprises of 15 investors who, having entered the market as early as 2016 and 2017 are presumably very rich.

The third group referred to as the ‘lost whales’ account for about 212,000 BTC, an equivalent of $1.3 billion with no transactions occurring on such accounts as far back as 2011 because owners have lost private keys with no means of accessing their accounts.

The last of this group is the ‘criminals’ comprising just 3 whales, and it happens to hold the smallest number accounting for only 125,000 BTC, worth close to $790 million. Of the three, two have been linked to the Silk Road darknet market and the third allegedly involved in money laundering.

It has been observed that only the traders, who account for a third of total whale shares are active buyers and sellers. The trend among others is to hold except for the “lost bitcoin whales” who have been inactive since 2011 and are very likely to remain so. Therefore, despite suggestions that trading whales influence market fluctuations, the available data, in fact, reveals otherwise.

If one tracked well, these trading whales actually purchased bitcoin during the price dip that occurred around December 2017 and in most of 2018 and did not sell in huge volumes in 2016 and 2017. This means that trading whales were mostly buying during and were thus, in fact, a stabilizing factor in the market, and not the opposite as is sometimes assumed.

As the report studies the Whale community and their wallets closely, it does give a good insight into the “whale” pattern of holding. It would be great to see how long do these whales hold on to their coins.

Is the report correct in its analysis regarding the whale community and their market movements? Do let us know your views on the same.

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BTC Whales Turns Friends to Crypto Markets as they Soak in Volatility from the Markets
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BTC Whales Turns Friends to Crypto Markets as they Soak in Volatility from the Markets
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BTC whales is about to change as according to new data from Chainalysis, has revealed that bitcoin whales are a surprisingly heterogeneous group of coin holders who might be doing more good than harm to the market.   
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Nilesh Maurya 416 Articles

Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Reach out to him at Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Reach out to him at [email protected]

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