You’ve probably heard of the “wolf” of Wall Street, but may not necessarily be familiar with Bitcoin whales. While neither of these monikers actually have anything to do with the animal kingdom, they both describe dominant creatures in the financial digital assets and cryptocurrency realm.
So, just what is a Bitcoin whale, or a crypto whale? It’s another one of those crypto terms that are worth knowing. In this article, we’ll run through a few examples of Bitcoin whales, and discuss how these whales can and have created ripple effects through the crypto markets on occasion.
What is a Bitcoin Whale?
Simply put, a Bitcoin whale is an investor that has a massive amount of Bitcoin holdings. If the average Bitcoin investor holds a single bitcoin in their portfolio, for example, a Bitcoin whale may hold 500 or 1,000 bitcoins.
“Whales” in the investing sphere are not solely relegated to the Bitcoin market. Whether it comes to investing in stocks or investing in cryptocurrency, the term “whale” refers to the same thing: An investor with a disproportionate amount of holdings compared to others.
Whales come in different sizes, so some Bitcoin whales are bigger than others. That said, it’s hard to get a clear gauge on the number and size of whales, because a single person or entity can have multiple addresses. As of July 2021, there are only a few whales that hold between 100,000 and 1,000,000 bitcoins, and around 80 that hold between 10,000 and 100,000 bitcoins.
How Do Bitcoin Whales Impact the Price of Bitcoin?
Now that you know what a Bitcoin or crypto whale is, it’s important to understand how these whales can affect the price of Bitcoin. Especially if you’re interested in investing in Bitcoin, or currently have Bitcoin in your portfolio.
Because they hold an outsized position in the market, whales make waves when they make moves. For example, if a whale decides to sell a large amount of bitcoins in one day, that will create a ripple effect in the market, and likely drive prices down as other investors follow suit. A whale could, potentially, shift market trends in whichever direction they’d like. (Yes, this can border on market manipulation.)
For example, let’s say a whale with a balance of 100,000 bitcoins wants to buy more. They could sell 50,000 of them — an amount that could catch the attention of other investors, who would start selling their holdings, which in all likelihood would lead to a drop in Bitcoin prices. The whale could then buy back their 50,000 Bitcoins (and perhaps more) at a lower price — profiting and padding their holdings at a discount.
In other words, they could create a dip, and then buy the dip.
This hypothetical situation highlights the type of leverage a whale could have on a market. They could suppress or pump up prices (which is something seen in other assets, like stocks, too), leaving smaller investors scrambling to keep up.
Because whales have potentially market-moving capabilities, other investors tend to watch them closely. “Whale watching,” as it may be called, keeps tabs on whale activity to get a sense of where the markets are heading. There are a number of social media accounts and websites that any interested whale watchers can follow. Not surprisingly, one need only search “crypto whale watch” or “Bitcoin whale watch” to find them.
Who Are Some of the Biggest Crypto Whales?
There are plenty of fish in the sea, and plenty of whales in the Bitcoin market. But we don’t know who many, if not most of them, are. You may remember that nobody even knows who the creator of Bitcoin is, other than it’s a person (or persons) that goes by the name of Satoshi Nakamoto.
So, just like the deep blue sea is full of mysteries, so is the cryptocurrency market. But there are a few whales that we know about, and that many investors choose to keep an eye on. Here are some of them:
The Winklevoss Twins
If you remember the movie “The Social Network,” you might remember the Winklevoss twins, who were portrayed in the movie by Armie Hammer. The two had a role to play in the early days of Facebook, but these days, the real-life investors are in the Bitcoin game.
Tyler and Cameron Winklevoss have amassed billions of dollars in Bitcoin, with their first acquisitions dating back roughly a decade. Since then, they’ve been involved in several cryptocurrency ventures and exchanges, as investors and founders. In 2015, the two launched Gemini, a crypto exchange that allows users to trade Bitcoin and other cryptocurrencies.
The twins are incredibly bullish on Bitcoin and have even said that they think it will outperform stocks and other assets over the next decade.
Tim Draper, another Bitcoin whale, is a venture capitalist who’s invested in a variety of companies from Skype to Tesla, and Robinhood to Ancestry.com. When it comes to Bitcoin, Draper made a splash in 2014 when he bought tens of thousands of bitcoins that were seized by the federal government.
Those holdings immediately gained him whale status in the Bitcoin market, and Draper has continued to amass additional bitcoins (along with other altcoins). He has said that he thinks Bitcoin’s value will rise into the hundreds of thousands of dollars.
Recommended: Should We Expect a Bitcoin Bull Run in 2021?
Michael Saylor is the CEO of MicroStrategy, a business intelligence company with a Bitcoin focus. Saylor’s become one of Bitcoin’s biggest proponents in recent years, and has seen his company’s holdings climb into the billions of dollars.
Saylor has made Bitcoin investing a primary function of MicroStrategy, which has even issued additional debt in order to raise funds to buy more cryptocurrency. As such, Saylor and his company have become Bitcoin whales in their own right.
Much like whales found in nature and in other areas of investing, a Bitcoin whale is an investor with a large amount of holdings — enough that they have the potential to move the market. Not surprisingly, the who and how many of Bitcoin whales is someone unknown, with a few exceptions.
Want to swim with the sharks, or pad along with the whales? With a SoFi Invest® brokerage account, you can trade Bitcoin as well as a variety of other cryptocurrencies including Bitcoin, Ethereum, Ethereum Classic, Litecoin, and Bitcoin Cash.
Photo credit: iStock/hemul75
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