[2018-10-12] Research: Bitcoin (BTC) Whales Not Moving the Cryptocurrency Market

[cybersofts]

Blockchain research firm Chainalysis released a report stating “whales,” or holders with a large token holding, are stabilizing cryptocurrency prices, instead of the popular belief that they manipulate the $215 billion crypto market.


Whales Stabilize BTC Prices

The rumors seem to originate from outsized bitcoin holders selling off their currencies at periodic intervals, causing considerable drops in BTC prices each time. Of such reports, the most recent originated in August 2018 after a holder sold 50,000 BTC, cumulatively worth over $2 billion, in a month and created a 15 percent plunge in the asset’s price.

Bitcoin’s infamously steep price drops cause panic amongst investors and industry observers while propagating a myth of the market being controlled by a few investors. However, an analysis of the 32 largest wallet holdings proves these statements are mere speculation.

Chainalysis researchers found out that most whales are dormant traders, and have held most of their BTC since purchase. Only 33 percent of analyzed wallets seemed to take part in the markets actively, and while they certainly have the funds to move the market on a whim, active whales were seen buying more BTC during market lows instead of causing the sell-offs.

Whales appear to stabilize the market during meltdowns, and from a trading standpoint, their vested interest could lead to “buying the dip” instead of participating in a market crash. Also, most whales used OTC platforms to manage large transactions, instead of selling their coins on a liquid cryptocurrency exchange.


“Whale” Groups Explained

Chainalysis classified crypto-whales into four groups based on the trading activities of the 32-largest BTC wallets. Together, they hold 1 million bitcoins or 4.7 percent of the total supply and account for $6.3 billion of the market cap.

The first group, whale traders, are those who transfer their holdings to exchanges to readily buy, sell, and trade bitcoin. For instance, nine observed wallets hold $2 billion in 332,000 BTC and make for the largest whale category. Interestingly, most of these whales entered the market in 2017, indicating the wallets and could be actively-managed crypto hedge funds as they saw an uptick last year.

The second group is made up by early adopters and Bitcoin miners, which entered the market much earlier than 2017. The classification includes 15 investors holding more than 332,000 BTC, and display “extremely low” trading activity. Most of these whales liquidated their holdings in 2016/17, and are likely “extremely wealthy.”

Moving on, the third group consists of “lost” whales, which hold 212,000 BTC worth $1.2 billion as per current prices. Unfortunately, these whales have presumably lost the private keys to access their wallets, as observed addresses shown no transactions since 2011.

Criminal wallets make up the last category in the list, consisting of Silk Road entrepreneurs and money launderers who hold 125,000 BTC, or $750 million, on their now-locked wallets.

Chainalysis researchers noted Bitcoin whales might continue to be a “mysterious” fixture for the cryptocurrency community; they have “less of an impact on market prices than many people believe.”

In conclusion, collated data suggests trading whales were net purchasers of BTC during December 2017 and “most of 2018.” Whales have not sold their holdings in a large amount yet, and instead, received more bitcoins from exchanges in 2016 and early-2017.


Source: https://cryptoslate.com/research-bitcoin-btc-whales-not-moving-the-cryptocurrency-market/

[darkangel11]

So, what is the conclusion? One whale sold so much in August that we had a major crash, one of the biggest this year. We also know that some of Mt. Gox funds were liquidated this year, which also falls into the category of whale dumps. Yet, the article suggests that the majority of whales don't cause dumps. It seems that the majority can be buying, but when one of them decides to sell the pressure is large enough to start an avalanche. To an average holder like me the this research is meaningless.

[senin]

This study should reassure cryptocurrency holders. The whales consider the cryptocurrency market to be promising and not only keep their bitcoins, but also recently bought them. Also, practically they did not participate in the depreciation of the cryptocurrency.
 I would now be interested in such a study on the behavior of whales in September-December last year, namely, whether they contributed to the rise in Bitcoin prices. It seems that this study confirms this assumption. During this period of active growth, they also bought Bitcoin, although smart traders should not have done so. From the current point of view, they then also acted at a loss.

[milewilda]

From the word "whale" you cant really remove into someones mind that these dudes/corporations/group of people that can really have that big effect when it comes to price increase or decrease due to their capability compared into just average investors or holders.It is already been part of the culture somehow that Whales do always take the blame when theres a big percentage price volatility.I agree that someone said above this might not be a major thing to consider but these movements can really spark out an avalanche and can create price reversals.