The whale is one of the famous typo terms in the cryptocurrency community. But only a few people know what a bitcoin whale is; a bitcoin whale is any individual or company with a massive number of BTC in their digital currency wallet. Visit CFD Trader to get a deep analysis of bitcoin trading. Bitcoin whales are bitcoin maximalists who are early movers in the decentralized ecosystem; as earlier, mining and buying BTCs was almost inexpensive.
Mining prospects were massive with personal computers, but now it necessitates a dedicated mining rig. Moreover, earlier, the spot value of an individual BTC was nothing compared to now. It is why people acquired the hold of a massive number of BTCs.
- Bitcoin whales alone comprise a considerable percentage of BTCs out of circulation. If rumours of Satoshi Nakamoto holding a million BTC are true, then alone, two leading bitcoin whales have acquired hold of 4% BTCs.
- The concept of the whale is not new in the financial segment as people who have bought massive stocks of a famous company. However, even the tiniest movement of these entities have vast bearings in the entire cryptocurrency marketplace.
- Majorly bitcoin whales account for the immense volatility of bitcoin. The skyrocketing volatility in the spot value of bitcoin further leads to a downfall in the liquidity of this digital currency. Bitcoin whales have impacted this market with a lethal mishmash of slumped liquidity and increased volatility.
- As per reports, Satoshi Nakamoto is the gigantic bitcoin whale of all time, and no bitcoin has bitcoin as of Satoshi Nakamoto.
Understanding bitcoin whale!
In simple terms, bitcoin whales are people or companies holding a gigantic BTC in their digital currency wallet. The typo term bitcoin whale became exceedingly popular when the movement of these people started to exert an impact on the spot value of bitcoin. You might have heard about a famous rule named 80-20.
As per this rule, 20% of holders of a particular commodity or assets hold nearly 80% of that particular asset. The rules fit in the bitcoin marketplace, and the leading bitcoin whale appearing in the top 20% of Bitcoin investors holds 80% of bitcoin present in circulation. As discussed above, only the two most enormous bitcoin whales hold 4% of bitcoin present in circulation.
Are bitcoin whales a problem for the bitcoin community?
Bitcoin whales can create several problems for innocent cryptocurrency investors as their movement has profoundly impacted the spot price of a digital currency. Bitcoin whales result in the concentration of BTCs at one place, and this further leads to a downfall in the liquidity of BTC. As a result of decreased liquidity, bitcoin whales are predominantly responsible for the increasing volatility of bitcoin’s market value.
Even if a cryptocurrency whale tries to sell their assets in fragments, it can result in market distortions. Market distortion is one of the prominent reasons for the unexpected rise and fall of bitcoin’s price. Moreover, whales formulate conditions for trading amongst other traders, which further results in volatility.
Some famous Examples of bitcoin whales!
Famous examples of bitcoin whales include Satoshi Nakamoto and the Winklevoss Brothers. Let’s discuss these bitcoin whales in detail.
Few sources have reported that bitcoin’s creator using the anonymous name of Satoshi Nakamoto is the enormous bitcoin whale. The suspense regarding Satoshi Nakamoto’s real identity is still there, but he is speculated to be holding a million bitcoin units.
No one knows who Satoshi Nakamoto is. Undeniably Craig White stated that he is a bitcoin investor, but the government found no proof of him holding 1.1 million Bitcoin. He claimed that he invented bitcoin alongside David Kleiman, and after this claim, David sued Craig White for not returning his 500K BTCs.
Winklevoss twins attained attention after the Facebook case. The twins have established themselves as a strong contender in the cryptocurrency community as they are the founder of an international digital currency exchange named Gemini. Winklevoss Twins are correspondingly famous bitcoin whales holding 100 K bitcoins.
Michael Saylor is the newest bitcoin whale as he started to invest in BTC after the above-listed bitcoin whales. His company holds more than 100 K bitcoin. The above-listed portion demonstrates a brief overview of bitcoin whales.