Those who hold the largest cryptocurrency wallets are called whales. Their influence is immense, almost unreasonably great, but nonetheless inevitable. In the cryptocurrency world, the term whale (whale, in English) means an individual or a company that owns an extremely large holding of a cryptocurrency. The term comes from the stock market universe. The analogy comes from the fact that when whales evolve in the ocean, they generate large waves capable of dragging smaller fish.
The main whales
In the world of bitcoin, it is considered that the possession of more than 1000 BTC is enough to characterize a whale. This implies that there would be about 2,500 in the world. In this way, the state of El Salvador, which holds 2300, is on a tear. The identity of most of these whales is unknown since the addresses of the keepers wallets (wallets) are largely anonymous.
Historically, Satoshi Nakamoto, the the official creator of bitcoin – but unknown in the real world – is said to be the largest whale in existence, as it holds over 1 million original BTC (bitcoins) which it has never sold. On paper, this would make him a multi-billionaire and even one of the richest people in the world.
Among the individuals holding large amounts of BTC are brothers Cameron and Tyler Winklevoss. For the record, these the rowing champion twins claim that they were behind the Facebook project or at least gave the idea to Mark Zuckerberg – this story was told in the film Social Network. A lawsuit began in late 2004 and resulted in an out-of-court settlement in February 2009. The two brothers walked away with more than $20 million and a portfolio of Facebook stock worth $10 million. However, in 2013, Winklevoss showed savvy by investing some of this loot in bitcoin, buying 78,000 BTC – when the cryptocurrency was worth $141.
Another whale, venture capitalist Tim Draper won 29,656 BTC in 2014 – when it was priced at $632. Barry Silbert, in turn, bought 48,000 BTC at the same time and created an investment fund, Group of digital currencies. Michael Saylor, CEO of software publication MicroStrategy has 130,000 BTC. Finally, major cryptocurrency exchanges, including Binance, and the kraken are by nature large holders of cryptocurrencies.
The whale effect
The effect of whales on the market is undeniable. It is enough for a whale to make large purchases or sales to strongly affect the price of a coin.
For example, if a whale places a massive sell order of BTC, ETH, SOL or others, it is often enough to cause the price of this coin to fall. Sometimes the whale acts on purpose: after the price has fallen enough, it can buy back BTC, ETH or others in bulk.
“We are far from the libertarian and idealistic vision that those who were at the origin of Bitcoin could maintain.“
In January 2021, Elon Musk announced which Tesla had bought for $1.5 billion BTC. A spectacular rise in the price of this cryptocurrency followed. And then, in July of the same year, Musk finally sold 75% of her BTC, thus helping to reduce the price. In a similar way, when Musk announced that he supported Doge cryptocurrencythis then secondary currency saw its high price.
This is why some speculators follow large portfolio activity – even if they are anonymous, it is easy to spot them in the crypto-universe – to “mimic” their behavior. Sites such as The watcher’s guru Where Map of the Whale or Twitter account Whale alert keep track of these cryptocurrency mega-expanders.
A handful of overpowered holders
The fact that around 2,500 whales can hold the majority of BTC holdings is not without problems. Thus, in November 2020, a Bloomberg study pointed out that 2% of Bitcoin accounts controlled 95% of BTC holdings. That a currency can see its evolution according to the tweets of Elon Musk, and other big fish, is far from the libertarian and idealistic vision that those at the origin of Bitcoin might hold.