Although Bitcoin whales have mostly been seen in a bad light, they could be useful in driving important events in the industry. According to Diar, Bitcoin whales who own at least 1000 BTC are responsible for bringing back the bull market that Bitcoin is currently enjoying.
Bitcoin price rise coincides with the accumulation
According to an analysis by Diar, there has been a steady increase in BTC being acquired by Bitcoin whales holding 1000 BTC or more. Those wallets currently hold 26% of the total Bitcoin circulating supply. Comparing the amount of Bitcoin amassed by these wallets in August 2018 when Bitcoin was also at $8,000 to the current amount, Diar said the addresses held under 20% of the circulating supply which has increased to 26% in less than a year.
The number of Bitcoins held by these addresses significantly increased by December of 2018 when the cryptocurrency bottomed. This could be due to a major buy-in of the bottom for storage ahead of a possible bull market like the one Bitcoin is experiencing now. The increase in the number of Bitcoin held amounts to $6 billion more than what was held in August 2018.
In addition, 40% of mined Bitcoins in 2019 have been claimed by these wallets while retail wallets holding 0 to 100 BTC have also received an additional 126,000 BTC this year and the number of wallet addresses under this category has been on the increase as well. Retail wallets currently hold 38% of Bitcoin’s total circulating supply but are not responsible for the current price rally because they are quite stable, the report said.
Interestingly though, on-chain transaction data suggests that there is a restricted supply of Bitcoins on exchanges which happen to own most of the major addresses. This is evident by the reduction in the amount of Bitcoin they hold which has declined from 21% of the total circulation to the current 16%. So far, they have collectively lost 300,000 BTC since the start of 2018.
BTC accumulation causes a price spike
The increase of 7% in the amount of BTC held by the major whales holding between 1000 and 10,000 BTC is responsible for the price surge, based on Diar’s data. This is a possibility as those BTC are nor lost but have been in the wallets and they have been quite active according to the report. If the holding of BTC has raised the price, what will be the implication of selling the accumulated BTC on the price? Is the market in danger of losing if the whales decide to sell?