Research: Crypto Whales Are Stabilizing The Market, Contrary to Popular Belief

In both the natural world and the crypto market, whales are seen as colossal creatures that have a profound effect on the environment around them. Since Bitcoins rise to fame, a countless number of cryptocurrency investors have claimed that whales have been the primary catalyst behind this markets unpredictable price movements. But, according to data compiled by one of the crypto industrys data analysis groups, the whale theory is nothing more than a popular urban legend.

Killer Crypto Whales? Think Again.

As reported by NewsBTC in early-September, following a 20% decline in the value of Bitcoin, the cryptocurrency community flew into a frenzy, as it wasnt immediately clear what caused the influx of sell-side pressure. Eventually, internet sleuths uncovered a specific, whale-owned Bitcoin wallet that transferred over 15,593 BTC to Binance and Bitfinex in the days preceding the 20% sell-off.

Although this could have been a rather untimely coincidence, many began to comprehend that the multiple to-exchange transactions which amounted to 15,593 BTC, valued at over $100 million, should be blamed for the move.

Contrary to popular belief, however, Chainalysis, which analyzes the cryptosphere as its name implies, revealed that this is far from the case. According to a study published by the startups team of analysts, the fears that whales could undermine crypto assets values are evidently overblown.

The post-mortem of the study, which took the form of an article that was fittingly titled The Not-So-Killer Whales of Bitcoin, first expressed that whales may not be as influential as many would initially think. Manhattan-based Chainalysis revealed that the 32 wallets it put under the microscope represent only one million BTC, which are valued at $6.3 billion at the time of press. While $6.3 billion isnt a figure to scoff at by any means, Bitcoins total market capitalization has swelled to a $110 billion valuation, indicating that whales arent the only game in town.

Even though a $6.3 billion sell-off could decimate order books, only one-third of Bitcoins 32 largest holders are active in todays market. This subset of Bitcoin whales, which the analytics firm refers to as traders, control 332,000 coins, which is approximately one-third of the collective value of all whale holdings. Interestingly enough, this group of users main consists of users who entered the cryptosphere in 2017, indicating that many trader whales were drawn in by the most recent bull run, which saw Bitcoin run from $1,000 to $20,000 in 12 short months.

It is important to note that miners and early adopters, who also hold 332,000 BTC, along with the other two types of whales — lost and criminals — do not have much influence over the market, as many of these wallets have yet to move copious amounts of BTC to exchange platforms.

Still, Chainalysis claimed that even the most active of whales have done little to push prices lower. In fact, the researchers claimed that during late-2017 and the earliest months of 2018, trading whales actually purchased more BTC than what was sold. This indicates that the individuals behind the pseudonymous wallets shouldnt be blamed for the crypto markets parabolic move upwards and its subsequent sell-o ...

Read full story on NewsBTC

Tags: Whale, Popular belief, Killer whale