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John Martin 23 Aug 2023 ◦ 8 min read

Cryptocurrency Market Whales: All You Need to Know

Cryptocurrency Market Whales: All You Need to Know

The term "whales" refers to investors who are large holders of digital assets. For example, they include the automaker Tesla, which owns 43 thousand bitcoin worth $1.7 billion, as well as the software manufacturer MicroStrategy, which owns 92 thousand digital coins worth $3.7 billion at the current time.

The actions of "whales" can often lead to various events in the crypto market. The recent collapse in the price of Bitcoin to $30 thousand occurred amid the fact a rumor circulated on Twitter about the sale of digital coins by Tesla. Later, Tesla CEO Elon Musk denied this information and said that the company had not sold a single digital coin since March of this year when it recorded a cryptocurrency profit of $101 million.

Who Owns the Most Bitcoin?

Now 3 cryptocurrencies (Bitcoin, Ethereum, Tether) occupy a dominant position — this is about 70% of the total crypto market capitalization.

The 10 largest Bitcoin wallets hold about 5% of all available coins. The owners of these addresses are the main whales on the market. The 100 richest wallets account for 14% of the total number of coins, which is a good indicator of decentralization. With this proportion, it is difficult for large players to manipulate the market due to the dispersion of assets. Tether (USDT) stores about 30% of all assets on the 10 largest wallets.

Analysts believe that most bitcoins are stored by the anonymous creator (or creators) of cryptocurrency. Satoshi Nakamoto is believed to have gained about a million bitcoins. Researcher Sergio Demian Lerner estimated that the creator of cryptocurrency could have manually mined 22 thousand blocks, which is equivalent to 1.1 million BTC. At the current rate, this is $62.4 billion.

A recent market study suggests that Chinese bitcoin billionaire Mikri Zhang, the founder of Bitcoin mining equipment manufacturer Bitmain, is second on the list of richest Bitcoin owners. Zhang's fortune is estimated at $3.2 billion. According to other sources, he is also second after Nakamoto in terms of the number of bitcoins belonging to him.

Roger Ver is also among the leaders in the number of tokens owned. Adept in Bitcoin Cash cryptocurrency, Ver began to invest in BTC back in 2011. In the same year, MemoryDealers, where Ver was the CEO at that time, began to accept cryptocurrency for payment.

Among bitcoin-owning companies, the first place in the number of cryptocurrencies is most often thought to be held by MicroStrategy, a company that works in the fields of business analytics and cloud services. As its head and part-time crypto enthusiast, Michael Saylor said in September that there are 114,042 BTC in the account of MicroStrategy, which at the current rate is about $6.47 billion.

Another major investor in Bitcoin among companies is, of course, Tesla. In early February 2021, it became known that the manufacturer of electric machines spent $1.5 billion on the purchase of cryptocurrency, or almost 8% of the cash available to the company. Even though Tesla (or rather, its CEO Elon Musk) has recently been closely associated with cryptocurrencies, the company has noticeably fewer bitcoins than MicroStrategy 38.3 thousand coins.

An interesting fact: for some time, the Bulgarian government turned out to be one of the largest holders of bitcoins in the world. In May 2017, the country's authorities confiscated more than 210 thousand bitcoins during an operation during which 23 people were detained. According to some reports, the very next year the country's authorities sold the confiscated cryptocurrency.

Behavioral Factors and Manipulation

Large holders of cryptocurrency are usually asset managers and investors who are active in traditional markets, have experience in investing, and also understand market trends.

Small investors try to track them and study the market on whale stats, as large holders of digital assets act professionally and choose investment options with the least risk of losing.

Therefore, if whales suddenly sell off assets, then this is a signal to the rest of the market that the exchange rate is expected to fall. If the whales buy cryptocurrency, the signal will be the opposite.

Whales usually play hide and seek to maintain anonymity. Contrary to the principle of decentralization, whales, due to their size, can still upset the balance sheet and affect the value of assets.

For example, the recent collapse in the price of Bitcoin to $30 thousand occurred against the background of the fact that on the social network Twitter there was a rumor about the allegedly massive sale of digital coins by Tesla. Later, Tesla CEO, billionaire Elon Musk, denied this information. He said that the company has not sold a single digital coin since March of this year when it recorded a cryptocurrency profit of $101 million.

Large holders of cryptocurrency are usually asset managers and investors active in traditional markets, who have solid investment experience, as well as a finely tuned understanding of market trends. Therefore, if whales suddenly sell off their assets, then this is a whale alert to the rest of the market that the exchange rate is expected to fall.

Do You Need to Monitor the Actions of Whales?

For most people, the answer will be an unambiguous no. In the end, the whales are interested in ensuring that the value of their coins is high, except when for some reason they plan to completely leave the market. If you try to grasp every wave they create, you will spend a lot of time.

The best long-term strategy is to monitor the situation in the market as a whole and understand why everything happens exactly as it happens. Only in this case, you can not only timely detect most manipulations by cryptocurrency whales but also successfully avoid them.

With long-term investment, only an idea of ​when you plan to leave the market, or the minimum profit you want to get (and, of course, a meticulous follow-up to this plan) will protect you from rash decisions and related losses. In short-term cryptocurrency trading, it is also worth installing a stop loss to protect your funds.

How to Track Activities

There are several ways to identify a whale in the market. The main one is using crypto whale trackers to see transaction movements between their wallets. Monitoring services are used for this purpose.

Large warrants can also indicate the presence of whales. During the bidding process, a bid with a large number of coins appears and when a certain price is reached, the bid is canceled. So whales move the price of the coin into the range they need, which is a good signal for other participants.

Various services, such as bitstat.top, allow you to monitor whale transactions. Transactions between Bitcoin wallet addresses can be viewed at the following sites.

Blockchain.info is one of the first services to provide information about transactions within the network. There are various graphs and other statistics about Bitcoin that allow you to track large BTC addresses.

Oxt.me is a site for tracking transactions in the blockchain. The purse address is entered on the start page and transaction data appears.

Blockchair.com a service for monitoring blockchains of popular cryptocurrencies (Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Bitcoin SV, and Dogecoin) in which you can view the details of the transaction and get a PDF report for it.

Not all wallet transactions and balances can be tracked in the public domain. This depends on the specific blockchain and its architecture. For example, cryptocurrencies such as Monero (XMR) and Verge (XVG) do not allow tracking transfers and have increased confidentiality. The level of dominance of such coins is not significant, which means that large holders will not be able to radically influence the general market.

What Tactics Do Whales Use?

One of the advantages of whales is the influence on the ability to buy a coin in a certain price range. For this, a large order is usually put up for sale at a lower price. The rest of the traders, seeing this, will begin to sell their assets. After the price approaches the desired mark, the whale will redeem coins at an acceptable price, before removing the previously issued order. The whale wave opens up opportunities for new investors, allowing you to profitably buy coins, and then sell them more expensive in a short time.

Pump and Dump

Used to artificially raise prices and earn on a short-term trend. Large purchase warrants are issued at inflated prices. Other bidders, seeing this, begin to buy coins based on rapid growth. After the price has reached a given level, the manipulators quickly sell assets and remove their overpriced orders. Then you dump and adjust the price to the previous key figures. This strategy includes lost profit syndrome or FOMO. New and inexperienced investors are trying to invest as much as possible in a trending coin so as not to miss the opportunity. Such events are fueled, as a rule, by news through various bloggers and groups on social networks with loud slogans. As a result, coins bought at the peak in a short time decrease in value.

The Wall of Sales 

This tactic is characteristic of promising projects with growth potential in price. An important aspect of it is knowledge of some insider information by a crypto whale, which is inaccessible to ordinary users. Its essence is to buy as many tokens and coins as possible at a low price. To do this, whales put up a large wall of sales without allowing quotes to move up. Other holders of these assets, without observing any positive dynamics, try to sell them. After a certain time (no more than a few months), the price goes up sharply, enriching whales.

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