Introduction to crypto whales

In December 2022, two dormant wallets belonging to crypto whales were suddenly active, transferring coins to unidentified new wallets.

This caused the market, and the price, to pause.

Today we’re diving into why whales matter.

How do we define a crypto whale?

A whale is an individual or entity that holds a large amount of cryptocurrency, known as a "crypto whale" or simply a "whale.” These individuals or entities can use their financial power to move the market in various ways.

The exact threshold for what qualifies as a whale is not clear, but it is generally accepted that owning at least 1,000 bitcoins (BTC) is a minimum requirement.

For reference, the Top 10 Bitcoin wallets hold 1,136,281 bitcoins, which represents 5.90% of all BTC.

Why are we talking about whales?

In December 2022, two dormant wallets belonging to Ethereum whales were suddenly active, transferring ~23K ETH (valued around $29M) to unidentified new wallets.

Abnormally large cryptocurrency transfers from hardware wallets — especially dormant wallets — to exchanges is typically a bearish signal. Most high networth cryptocurrency traders hold their funds on a hardware wallet(s). 

When whales transfer crypto onto an exchange, this typically means they are looking for liquidity.

Why do whales matter?

The crypto community and investors pay close attention to these large accounts. If any of the top 100 wallets make transactions, they are immediately reported on by service like @whale_alert on Twitter, which has 2M+ followers.

Do whales manipulate crypto prices? 

“Manipulate” is a strong, complicated word.

Manipulate can mean to control or influence it in a clever or even an unscrupulous way, often for one's own advantage. Manupulate can also mean to alter, edit, or move… and when whales buy or sell large amounts of crypto, markets move.

Whale manipulation is a risk in both traditional financial markets and cryptocurrency markets, despite the efforts of all parties to prevent it.

What happens when dormant whales move crypto?

This can cause increased market volatility as other investors try to anticipate the movements of the whales.

What happens when whales sell crypto?

When whales sell their holdings, other investors pay close attention, looking for signs that the whales are "dumping" their assets. 

Who are the crypto whales?

It is not easy to determine the names of crypto whale, as their ownership is often anonymous (see: Satoshi Nakamoto) and can fluctuate. However, it is important to note that the identity of a crypto whale does not necessarily affect their potential to sway market prices.

More notable known whales are:  

• Michael Saylor
• Changpeng Zhao (CZ)
• Vitalik Buterin https://en.wikipedia.org/wiki/Vitalik_Buterin
• Tim Draper https://en.wikipedia.org/wiki/Tim_Draper — "In five years you are going to try to go buy coffee with fiat currency and they are going to laugh at you because you're not using crypto."
• The country of El Salvador https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

Are there also crypto minnows?

Yes. 

A crypto minnow is a term used to describe a holder of a small amount of cryptocurrency in comparison to a whale. This is typically determined by the size of the wallet address holding the cryptocurrency. 

It is not typical, but even minnows can occasionally have a significant effect on the market. This can happen when an altcoin has low trading volume and poor liquidity, leading to significant price changes after a small transaction.

Where can I see a list of crypo whale accounts?

BitInfoCharts shares the Top 100 Richest Bitcoin Addresses, and they also have a list of Top Dormant for 5 years Bitcoin Addresses.

WhaleStats is an incredible resource for a broad range of coins.

Investor Summary

Crypto whales are individuals or entities that hold a large amount of cryptocurrency, with owning at least 1,000 bitcoins being a minimum requirement. Their financial power allows them to move the market, and their transactions are closely watched by the crypto community and investors. When whales transfer or sell their cryptocurrency, it can cause increased market volatility, and there is a risk of manipulation in both traditional financial and crypto markets. There are also crypto minnows, which are holders of a small amount of cryptocurrency in comparison to whales.

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