In a very informative webinar, the research firm made the surprising claim that crypto “whales” – individuals with more than $56 million in – pose no serious risk to the .
What Constitutes a ‘Crypto Whale?’
Chainalysis defines a whale as an investor sitting on at least $56 million worth of at current prices. | Source: Shutterstock
In the presentation titled “Who are Today’s and Cash Whales?,” Chainalysis breaks down the types of whales into several categories including “criminal whales,” “early adopter whales,” and “ whales.”
One item of interest: whales, on average, hold about 250% of the crypto that regular whales hold. The company defines a BCH whale at about twice the rate they categorize a whale. So, to be a whale by their definition, you must hold at least 15,000 . To be a Cash whale, you must hold at least 30,000 BCH.
Early adopter holdings have dropped from 9% of all in circulation to roughly 5% today. The presenter told viewers that inflation via is only part of the reason for this – some whales did sell part of their holdings during bull runs. The company sees this as a sign of health for the crypto economy. They note that “ whales” have the most positive effect of the whale classes – they provide a “stabilizing effect.”
Dear noobs,
is NOT naturally going down. It is being pushed down via whales placing spoofy sell orders on exchanges to make noobs and risk managers sell to “buy back lower”. They are stealing your bags and will make you buy back at a higher price.Retweet this.
— Moon Overlord (@MoonOverlord)
whales have begun to supplant other types of whales in terms of their holdings. At the end of the webinar, someone asked if whales might also be early adopters. The presenter said that while some early adopters had shown signs of trying to accumulate more later on, it generally wasn’t significant enough for them to cross over into the other category.
Every Whale Could Splash and bitcoin Price Would be Safe
The semi-opacity of the means at least some of the addresses studied are probably small groups of traders, rather than individuals. The good is that the actual threat that all whales pose to the economy is relatively low. If they sold off their entire holdings, it would be effectively a $3.9 billion at current prices. That’s not quite 10% of the current total of .
The price is relatively safe from whales. | Source: Yahoo Finance
Obviously, a sell-off in that range would have some impact. Bear bots would respond, but so would bulls. The net effect on the price of is decidedly low, according to , anyway.
That said, we’ve never seen the true impact of such a sell-off. If strong sell orders of this magnitude were actually put into play, the actual outcome is difficult to determine. One aspect of such a scenario is that new coins would be entering exchanges for the first time.
We know that up to 2.5 million change hands every day on exchanges, but often enough these are the same coins being traded over and over again. Most whales sell with the expectation of buying it back cheaper – they increase their holdings, further delineating the risk of other types of whales.
‘Criminal Whales’ Present Lowest Threat to bitcoin Price
The one group of whales who effectively pose the smallest risk to ’s price are criminal whales, or people who’ve made their money from . These whales don’t sell in the same way that other whales will, so the existential risk they pose is much lower.
When criminal whales sell, they want to evade detection. Think gift cards and laundering schemes. They’ve also begun to move to privacy coins over the years. The transparency of the is not an asset to these types of whales, so they tend not to use it unless necessary.
Published at Thu, 07 Mar 2019 21:12:49 +0000
