Accused of being behind the slightest suspicious movement, upwards or downwards, the “Bitcoin whales” are as jealous as they are feared!
Thus, prominently in the vocabulary and recurrently in exchanges with other enthusiasts of crypto, you will often come across the concept of whales, or “whales” (a whale, but with an English accent).
Peaceful cetaceans working for the stability of the cryptocurrency market or terrible bloodthirsty sea monsters, ready to send by the funds the frail skiffs of small investors? It’s time to go to sea!
From Casino to Bitcoin, a little story of whales
Whales did not wait for Bitcoin to come to haunt the shoals and the nightmares of the traders. We find their trace from the moment when the very notions of marketplaces, stock exchanges and trading appear. The terminology comes from the world of casinos where the qualifier ” whale Was awarded to the big players, capable of dropping crazy sums. We can see how, from its inception, the trading world has had a common ancestor with gambling and the lottery …
In the world of traditional finance, whales materialize as much the actors weighing hundreds of billions of dollars, as the aristocracy of traders, capable by a simple movement of purchase or sale, to significantly impact the market.
In order to have a tangible scale, keep in mind that the largest European whale, Amundi weighs more than 1000 billion euros. A very beautiful creature, but one that figures fragile fry reported to American monsters like Black rock with its more than $ 5,000 billion in assets under management …
As for individuals, it’s hard not to mention the famous “Thames Whale”, nickname of the London trader Bruno Michel Iksil. Londoner’s risky bets on the infamous Credit default swaps CDS will also earn him the nickname “The-one-whose-one-should-not-pronounce-the-name”, demonstrating how much the financial sector likes to be afraid of itself with a very specific iconography.
Now, from the moment Bitcoin, some time after his birth in 2009, became a financial asset “almost like the others”, he did not fail to see appear – and get bigger as its value increases exponentially – a school of crypto-whales.
Do Bitcoin Whales rain and shine in the crypto market?
In a market as narrow and specific as that of cryptocurrency, whale status is mainly associated with the amount of assets held by a single actor (or a group of actors acting in concert). This quantity gives the latter the power to influence the market because of its relative size, related to the entire industry.
A vast crypto-ocean!
It’s worth remembering: each crypto has its own dedicated whales: Ethereum, NEO, Litecoin… up to the lowest values of CoinMarketCap.
So, know that if you have 600 dollars of tokens EvaCash (EVC), you are very officially a whale of this crypto, at the head of 10% of its capitalization. To you the course manipulations and the intoxication of pump and dump ! (even if with 45 USD daily transaction value, you will likely be closer to Broadway Shrew than Wall-Street Wolf, but stay positive: it’s a start!).
You will understand, with its capitalization of almost $ 170 billion (as of 5/11/2019) and its ability to influence the entire rest of the crypto market is good in the deep waters of Bitcoin that there are authentic whales, the object of all attention and a kind of fear of a quasi-religious nature.
The Bitcoin Whale, this stranger
By consensus, it is estimated that the total population of Bitcoin whales reaches the 1000 specimens which would control almost 40% of the total amount of bitcoin in circulation.
Do you find this proportion frightening? Refresh your memory about the actual breakdown of Bitcoin by going back to take a look at the article “In 10 years, Bitcoin has made 17,000 millionaires” and revising your whaling tables:
A fin stroke in the water?
The real question, the one that often obsesses amateur traders who, although unable to explain their crypto setbacks other than by the necessarily occult manipulation of “The invisible hand of the market”, rather than discerning their own naivety or inconsistency, simply formulates: Do Bitcoin whales manipulate the market and prices as they please?
This is, so to speak, the thesis of a recent article by Bloomberg which, in essence explains, diagram supporting, that the “Bull run” of 2017 was triggered by a single actor: a giant whale piloted by the duo Bitfinex–Tether (two-headed entity behind the famous USDT, stablecoin backed by the dollar and whose rebounds and multiple adventures – including judicial -, amuse as much as the whole industry regularly terrifies).
Alas, this theory, because it is one, has been fairly widely debunked since then:
In order to have elements probably more reliable and less sensationalist, it is not useless to refer to the study the company specialized in Crypto audit Chainalysis.
According to the latter, who looked into the activities of 32 most significant Bitcoin wallets (1 million BTC, representing more than $ 6 billion in assets), the phenomenon is clear: by buying back when the market drops (in order to further strengthen their positions), the whales are working to ensure that the market has effective countermeasures so as to go into a crash outright.
Regarding the rise in prices and the intrinsic value of a Bitcoin, we also wonder what interest would these major players find in shooting themselves in the foot by refraining from seeing their capital and profits increase all the more… (it’s been a while since the libertarians have left to evolve in other waters, only pure-sugar capitalists are in control, you doubt it?)
Whales perform an obvious “safety net” function when the market is bearish, re-injecting liquidity into it. Moreover, these noble cetaceans have little interest in acting to counter the rise in the price.
It is obvious that the market is being manipulated. On the other hand, considering Bitcoin whales as something other than an important component of the crypto ecosystem, it is probably bypassing deeper causes, focusing only on the marine mammal stranded in the middle of the show.
However, finding that Bitcoin is controlled by a few hundred actors, in clear violation of Satoshi’s Law No. 1, materializes a problem probably much more profound with regard to the original vision of its creator … but it is a another story!
Nice to meet you, it’s Hellmouth! Editor-in-chief of Bitcoin, the crypto media you are honoring to survey right now (well done, you have taste).
Crypto-enthusiast of the second hour, nothing is more important to me than supporting the global adoption and democratization of the treasures that the blockchain offers us.
I write articles between two cocktails in Tahiti, my adopted island, and do not hesitate, if the opportunity arises, to feast on a plump scam or a little too enterprising Ponzi pyramid.
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