A Bitcoin whale refers to individuals or entities that possess large amounts of Bitcoin. Many Bitcoin whales are anonymous traders, exchanges and hedge funds, identifiable only by their public addresses. According to industry data, around 1,000 people own 40% of all existing Bitcoin.

Bitcoin whales are most commonly early Bitcoin adopters who own millions in crypto assets. They can also be rich individuals, attracted by the risk, who have entered the crypto sphere as a new area for income, or major institutional investors such as hedge funds who place large bets on where the market will move next. The Winklevoss twins who are thought to own approximately 170,000 Bitcoins are prime examples of Bitcoin whales.

Due to the large size of a whale trader’s position and the fact that the cryptocurrency market remains largely unregulated, whale traders can influence markets to move in their preferred direction when they make large buy or sell orders. It’s therefore essential for traders to observe

whales, paying close attention to how, when, and where they trade. If we look at the market as if it were the ocean, small fish have little to no influence on the current as such to survive they must swim with it. Whales on the other hand have the power to cause rough stormy seas disrupting the flow and wiping out the small fish.

On January 8th 2021, Bitcoin reached an all-time high of $41,973 due to the high premium Coinbase had at the time pushing U.S. buyers to aggressively accumulate Bitcoin, driving up the market as a result. Additionally, there has been continuous selling pressure stemming from Asia, particularly from South Korea. As of the 27th January 2021, the price of Bitcoin has gone down to $30,859.

Currently, the Bitcoin market is witnessing a battle between whales taking profit on their positions and new buyers in the U.S market accumulating Bitcoin. This has resulted in continuous extreme volatility ever since Bitcoin surpassed $30,000. This upside momentum of Bitcoin is likely to be sustained in the foreseeable future as more hedge funds and investment banks begin to pick up cryptocurrencies, introducing a new class of whales.

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The post Behind the Bitcoin Whales: Who Are They and How Do They Work appeared first on Coin Journal.

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