One of the things that has become a source of concern for many investors in the past are the “whales”. These are individuals that have large hoards of digital currency. A research by crypto forensics company Chainalysis has examined 32 of the biggest whales and the impact that they can actually do to the crypto market.
What makes whales alarming is that they take control of around 1 million of the 17 million bitcoins that have been mined to date. The smallest wale in the sample holds around 12,000 bitcoins and the largest holds around more than 85,000 bitcoins. Currently, that is worth approximately around $75 million and $541 million respectively.
It is no secret that the crypto niche has attracted illegal activities. It has been one of the primary reasons for the regulatory changes that have been applied by different countries. And on most occasions, criminal activities are the reasons for the hesitation of many regulators today to dabble with cryptocurrencies. Money laundering and crypto’s use in the dark web are just some of the things that gave cryptocurrencies a bad reputation over the years.
Chainalysis categorized the 32 whales into different categories. One of which is “criminal whales”. These are the whales that were most likely able to conduct illegal transactions and made some Bitcoin while it was still low.
There is also a category for the “trader whales”. These are whales that entered the market around 2017. And these whales are actively buying and selling.
Whales Manipulating the Price?
There is a suspicion that whales are actually manipulating the price of Bitcoin. Remember that to the reason by the US Securities and Exchange Commission for rejecting Bitcoin ETF applications is the possibility of price manipulation. According to the Chainalysis report, there are only a few of them. Three of these whales are only trading on Asian exchanges.
Now, there are also the whale miners. These are individual wallets that have amassed Bitcoin via mining. This was especially true during the time when Bitcoin mining difficulty wasn’t as hard as it is today and not as expensive at all. According to the reports, these miners usually sell their stash but are more inclined to holding Bitcoin for the long term.
And lastly, you have the “lost whales”. These are individuals that have amassed large quantities of Bitcoin during the early days. However, with the lack of wallet activity, it is possible that they have lost their key or someone has died already. In fact, last year, it has been discovered that around 4 million bitcoins are lost forever.
The conclusion that can be made on the study is that whales may have far less of a role in the Bitcoin market. Of the top 32 whales, they control around 6% but that figure has dropped to 4.6% if you will be considering the lost bitcoins. Also, there are only a few whales that are active in the market. And on most occasions, these whales are looking at Bitcoin for the long term.
Can whales play a major role in the future? This is left to be seen once there is more activity found in these wallets.