Bitcoin Whales: Exploring the World of Crypto's Biggest Players

April 23, 6:01 pm

Whales are important players in the crypto market. They hold sufficient currency to influence the industry’s dynamics. Their actions can trigger market movement and inspire other traders to sell or acquire a particular crypto. If you plan to buy Bitcoin, checking out what the crypto whales are doing now can be a smart move.

In the BTC market, the leading whales include the following:

Satoshi Nakamoto. We only know the Bitcoin creator by this pseudonym. The estimation is that his wealth is now at 1 million BTC, indicating he’s the biggest whale in the entire crypto industry.

Changpeng Zhao. He used to be Binance CEO, but it’s hard to estimate his BTC assets. The total net worth of his crypto investments is about $65 billion.

Tim Draper. He holds about $1 billion in BTC. Draper is famous for his recent interview, in which he stated that the halving and ETFs could triple Bitcoin’s price this year.

Michael Saylor. Over 17,000 BTCs are in his ownership, and even more are held by his MicroStrategy company.

Would you like to learn more about Bitcoin whales and their strategies? Keep reading for more details.

How Much Wealth Identifies a Bitcoin Holder as a Whale?

There’s no exact definition of the BTC amount you need to be a whale. The community estimates that it’s necessary to have at least 1,000 bitcoins to influence market actions and other investors. That’s the widely accepted minimum for people to consider you a whale. Others look at your total crypto assets and place the threshold at around $10,000,000.

The threshold might be somewhat higher for companies to become whales, but it largely depends on their actions. You could have only 100BTCs but still have the power to influence several other investors and trigger an avalanche that could affect the entire market.

A new project focused on crypto and BTC might also influence the prices. For example, crypto projects driven by women have been attracting much attention, and we could see some of them becoming new whales soon.

The Impact of Whale Activity on Cryptocurrency Markets

Whales can have a significant impact on a crypto’s price and liquidity. If they decide to act in the market, the odds are a single trade will be worth thousands or millions. Those orders can trigger short-term price spikes or drops.

These could happen suddenly and surprise the market.

Let’s say that a whale decides that they want to purchase 1,000 BTCs. That creates a higher market demand, which soon drives Bitcoin’s price up. If a whale decides to sell a huge part of their BTC portfolio, the odds are a market crash will happen soon.

Crypto whales also affect a currency’s liquidity. Let’s say they decide to hold 20,000BTCs for months. The large concentration of wealth makes fewer coins actually available, which affects Bitcoin’s liquidity.

What 3 Trading Strategies Do Bitcoin Whales Use?

If you wonder if crypto whales resort to influencing the market, the answer is a clear yes. They focus on their significant holdings and assess how trading decisions would affect price movements. Here are the three strategies that Bitcoin whales usually apply in the market.

Short and Long Trading

These two approaches usually focus on scaring away smaller investors. The first move occurs when a whale believes the BTC price will decline. They sell huge amounts of cryptocurrency, causing the market to drop further.

Once the market reaches a place where the BTC price is low, and whales believe the currency should gain a positive momentum soon, it’s time to acquire some coins. That’s when whales start buying BTC, driving the price up and enabling them to sell at a higher point for profit.

Stop-Loss Hunting

Many whales don’t only trade BTCs; they use other currencies to their advantage, too. Here’s an example of a stop-loss hunt:

A whale has ADA coins worth about 60 BTC, aside from the existing Bitcoins in wallets.

The trader believes that ADA will have a price increase soon. That’s why he acquired more ADA and now has 100 BTC worth of that currency.

The problem is there aren’t enough sell orders. It’s why the whale places ADA sell orders and drives the price down. It also motivates others to sell because there’s panic.

It’s now possible for the whale to acquire new ADA assets.

The remaining thing to do is to wait for the ADA price jump that they predicted.

As you can see, the idea is simple. Whales trigger sell orders to motivate other investors to sell their assets. The whales then purchase the assets and wait for the market price increase.

Market Manipulation

According to reports, more than half of all BTC trades could be bogus. Market manipulation is present in the crypto market, and here are the common strategies applied:

Pump and dump. The idea is for several investors to join forces to increase the coin’s value artificially. It’s not easy to do this with BTC due to its high worth, but it’s often present with low-valued coins.

Wash trading. The idea is to deliver misleading info to the market. It could be revealing false info or even selling or buying crypto to affect the price.

FUD. The abbreviation stands for fear, uncertainty, and doubt. It’s a manipulation technique that can affect the price without actually someone selling or buying the coins. Essentially, this method relies on false propaganda, such as launching fake content via influencers, blogs, etc.

Conclusion

Most investors won’t become crypto whales, but every trader should pay attention to what they are doing. That could help predict the market movements, especially in the short run. Understanding different strategies used by whales can also help distinguish false info and identify potential trends, which could help go with the flow and boost your portfolio accordingly.

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