Those who hold the largest cryptocurrency wallets are referred to as whales. Their influence is immense, almost unreasonably great, but nevertheless inevitable. In the world of cryptocurrencies, the term whale (whale, in English) means an individual or company that holds an extremely large holding of a cryptocurrency. The term comes from the universe of the stock market. The analogy comes from the fact that as whales evolve in the ocean, they generate large waves capable of carrying smaller fish along them.
The main whales
In the bitcoin world, owning more than 1,000 BTC is believed to be enough to characterize a whale. This implies that there would be around 2,500 of them in the world. Thus, the State of El Salvador, which holds 2,300, is in the lot. The identity of most of these whales is unknown since the addresses of the keepers of wallets (wallets) are mostly anonymous.
Historically, Satoshi Nakamoto, the official – but unknown in real life – creator of bitcoin would be the biggest whale in existence, as he holds over 1 million original BTC (bitcoins) that he never sold. On paper, that would make him a multi-billionaire and even one of the richest men in the world.
Among the people holding huge amounts of BTC are brothers Cameron and Tyler Winklevoss. For the record, these champion rowing twins claim to have been behind the Facebook project or at least to have given the idea to Mark Zuckerberg – this story was told in the film The social network. A lawsuit began in late 2004 and ended in an out-of-court settlement in February 2009. The two brothers walked away with more than $20 million and a $10 million worth of Facebook stock portfolio. However, in 2013, the Winklevoss showed savvy by investing some of this haul in bitcoin, buying 78,000 BTC – when this cryptocurrency was worth $141.
Another whale, venture capitalist Tim Draper acquired 29,656 BTC in 2014, when its price was $632. Barry Silbert, for his part, simultaneously acquired 48,000 BTC and created an investment fund, the Digital currency group. Michael Saylor, CEO of software publication MicroStrategy holds 130,000 BTC. Finally, major cryptocurrency exchanges, including Binance and Kraken, are inherently large holders of cryptocurrency.
The whale effect
The effect of whales on the market is undeniable. It is enough for a whale to make a major purchase or sale, for this to strongly affect the price of a currency.
For example, if a whale places a massive order to sell its BTC, ETH, SOL or others, it is often enough to drive down the price of this currency. Sometimes the whale acts intentionally: once the price has fallen enough, it can again buy BTC, ETH or others en masse.
“We are far from the libertarian and idealistic vision that those who were at the origins of Bitcoin could maintain.“
In January 2021, Elon Musk announced that Tesla had bought $1.5 billion worth of BTC. A spectacular increase in the price of this cryptocurrency followed. And then, in July of the same year, Musk finally sold 75% of his BTC, helping to drive the price down. Similarly, when Musk announced that he was backing the Doge cryptocurrency, this then-secondary currency saw his price soar.
This is why some speculators track the activity of large portfolios – even if they are anonymous, it is easy to spot them in the crypto universe – to “imitate” their behavior. Sites like Watcher Guru or WhaleMap or the Twitter account Whale alarm keep track of these cryptocurrency mega-expanders.
A handful of holders with excessive power
The fact that around 2,500 whales may hold the majority of BTC holdings is not without its problems. Thus, in November 2020, a Bloomberg study showed that 2% of Bitcoin accounts controlled 95% of BTC holdings. That a currency can see its course evolve according to the tweets of Elon Musk, and other big fish, is far from the libertarian and idealistic vision that those who were at the origins of Bitcoin could maintain.