[2018-02-12]The 65 Percent Price Dip Has Made ‘Bitcoin Whales’ A lot More BTC

[rumblesix]

Last year bitcoin had a phenomenal run leading up to its all-time high of $19,600 per BTC this past mid-December. The price over the past few weeks had since dipped to a low of $5,900 on Monday, February 5, losing close to 65 percent of its value in a short period. The dip has ‘rekt’ a lot of cryptocurrency traders but the ‘richest bitcoin holders’ have gained thousands more BTC taking full advantage of these significant price variances.

Bitcoin Whales Use Big Price Swings to Accumulate More Wealth

Cryptocurrency enthusiasts understand that digital currencies often fluctuate in price and over the years many traders have been able to take advantage of these swings. Essentially if a trader can guess the top and sell their bitcoins, then follow that maneuver by buying back in at the bottom, that individual can gain a lot more coins. One particular group of BTC holders that have taken advantage of these swings time and time again — are the top 100 richest ‘bitcoin whales.’ The individuals or groups of people known as bitcoin whales hold vast quantities of cryptocurrency and they can sometimes use their assets to ‘move the market.’ According to data collected from Bitinfocharts.com most of the 100 richest BTC addresses haven’t lost any money during the last 65 percent dip — In fact, their stacks of BTC increased exponentially.

The Richest Address Has Gained An Exponential Number of Bitcoin’s Since 2016

Take for instance the owner of the most substantial amount of bitcoins located in one address which currently holds 167,000 BTC at the time of writing. The wallet started collecting BTC approximately two years ago when the address recorded its first deposit of roughly $840 dollars worth of BTC. Now there is $1.4 billion USD worth of BTC held in the wallet as thousands of coins have been collected since its inception. Coincidentally this bitcoin whale has been able to acquire a lot more BTC during each meteoric rise in value, and the typical dumps that follow soon after. In 2017 there have been six ‘major’ corrections that have seen BTC lose over 30 percent or more of its value, and this particular whale has gained more funds every single time.

‘Whale Sightings’ and Speculating Collusion

Many of the wealthiest bitcoin addresses besides wallets that have been dormant for years have followed the same pattern. These bitcoin whales have been able to accumulate more bitcoins due to catching the highs and lows at precisely the right time. Perusing through the top 100 richest addresses shows many of them sold thousands of BTC at once between November and December 2017. Bitcoiners have had many ‘whale sightings,’ and you can often see forum posts and Twitter conversations concerning these market movers during big price spikes and subsequent dumps. For example, on November 12, 2017, when cryptocurrencies were reaching new price highs, blockchain spectators noticed 25,000 BTC was sent to the exchange Bitfinex.

The most affluent bitcoin holders have been a controversial subject for quite some time. Mainstream media likes to assume that 1,000 addresses own more than 40 percent of the market. Some speculators believe whales can even contact each other, which could lead to enormous BTC market movements. Kyle Samani, the managing partner at Multicoin Capital, believes this theory and states:   

''I think there are a few hundred guys — They all probably can call each other, and they probably have. ''

The Data Collected from the Richest Addresses to Depict Wealth Distribution Always Fails

However, a research report published last fall reveals that the assumption that “1,000 people own 40% of the BTC market” is false. According to data collected by the Bambou Club, many models of the current distribution of bitcoin wealth that analyze wallets and addresses usually “always fail.” Bambou Club says that the issue with most data estimates is they fail to recognize the relationship between the owner, wallet, and address. “It is not necessarily 1: 1: 1,” explains the report.

“That is to say, it is not true by definition that one person has one wallet that uses a single bitcoin address,” the trading analysis group Bambou Club notes.

For a start, a person may hold many bitcoin wallets. And a wallet can make use of many bitcoin addresses. (Indeed it is advisable to generate a new address every time you use your wallet for reasons of anonymity.) So the relationship can be 1: Many: Many.

Whales Are Getting Bigger, But It Only Takes 15 BTC to be In the Top One Percent

Essentially using a different method of data collection, Bambou Club derived the distribution of global wealth and the global ownership of bitcoin numbers, then the researcher mapped the wealth distribution to calculate a better bitcoin distribution analysis. According to the study, there are more than 25 million bitcoin owners, and it only takes 0.153 BTC to be placed in the top 30 percent most affluent bitcoin owners. Moreover, you only need “15 BTC to be in the top 1 percent,” the data reveals.

While it’s true bitcoin whales are continuing to accumulate BTC over time, mainstream media’s portrayal of the 1 percent is a bit skewed according to a different method of analysis. We don’t know if the whales work together to move the price other than mere internet speculation. But we do know that over the course of various market fluctuations over the years, and especially this past 70 percent dip, many of them have become much larger fish in the sea of bitcoin wealth distribution.

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[Kakmakr]

Well, this make a lot of sense. You own a significant amount of coins and you want to own more. So what do you do? You sell some coins to acquire some fiat, when the price is high and then gradually dump large amounts of coins to trigger a sell-off. The Bitcoin market is full of speculators, so they will be trigger happy to protect their investment.

When the price has dropped low enough, these whales use the fiat they acquired to buy back most of these cheap coins that are sold for a bargain price. This increase their bitcoin holding, because they are buying back cheaper coins. ^lol^

[rumblesix]

Well, this make a lot of sense. You own a significant amount of coins and you want to own more. So what do you do? You sell some coins to acquire some fiat, when the price is high and then gradually dump large amounts of coins to trigger a sell-off. The Bitcoin market is full of speculators, so they will be trigger happy to protect their investment.

When the price has dropped low enough, these whales use the fiat they acquired to buy back most of these cheap coins that are sold for a bargain price. This increase their bitcoin holding, because they are buying back cheaper coins. ^lol^

So this is the right time to buy some bitcoins?

[carter34]

Yes I agree that is how the market moves, the whales manipulate the market with the so much coins they have acquired. They dump especially when there is FUD to expect the market to shrink up and they buy in again at the buttom. Meanwhile, if your speculation do not work out well as a minor trader and you dump in expectation to buy in again, you might not be sure when the train starts upwards again. This is why you just hodl until you get to where you want to take your profit.

[Carlton Banks]

So this is the right time to buy some bitcoins?

SOME, yes.

The price could drop from here, not even the whales know accurately what will happen. The trick is to take obvious opportunities while they're there, but not to assume they're the only opportunities. Buy A LITTLE (i.e. don't spend your whole budget) when prices SEEM low, then wait. Sell A LITTLE when prices SEEM high, then wait. Repeat until winning.

[odolvlobo]

It looks like whales are the new boogeyman, now.

Anyway, it is not surprising that whales have increased their holdings. The price has dropped 65% and that means that many people have exited, and a huge number of bitcoins have been sold to the people that have remained, whether they are whales or minnows.

[1Referee]

Everyone with common sense has ended up with more coins after the most recent correction/crash. I started securing profits at $15,000 and continued doing so till a little over the $18,000 level last year. I kept buying back in smaller fractions all the way down to almost very close to the bottom. If I look at my net results in terms of coin quantity gains, for every 1BTC that I sold, I have managed to buy back ~1.85BTC. The results could have been a bit better if I didn't start with buying at +$10,000 levels, but you can't exactly know how deep the price will end up going down initially. Overall, I am very happy with the results, and look forward to more if the market isn't comletely bottomed out yet.

[J. Cooper]

And this is exactly why rich people, in general, get richer. While bitcoin was ramping up to $20k whales were taking profits while minnows were eagerly buying. This irrational behavior of the masses will disallow them to be successful in when it comes to finance and trading these markets. Instead of seizing opportunities on a red day, they get carried away by the hype and FOMO on the green days.

Everyone with common sense has ended up with more coins after the most recent correction/crash. I started securing profits at $15,000 and continued doing so till a little over the $18,000 level last year. I kept buying back in smaller fractions all the way down to almost very close to the bottom. If I look at my net results in terms of coin quantity gains, for every 1BTC that I sold, I have managed to buy back ~1.85BTC. The results could have been a bit better if I didn't start with buying at +$10,000 levels, but you can't exactly know how deep the price will end up going down initially. Overall, I am very happy with the results, and look forward to more if the market isn't comletely bottomed out yet.

Regardless of buying back in around $10k initially, you still had some good results netting a profit of .85 btc per bitcoin sold.

[Harlot]

Well, this make a lot of sense. You own a significant amount of coins and you want to own more. So what do you do? You sell some coins to acquire some fiat, when the price is high and then gradually dump large amounts of coins to trigger a sell-off. The Bitcoin market is full of speculators, so they will be trigger happy to protect their investment.

When the price has dropped low enough, these whales use the fiat they acquired to buy back most of these cheap coins that are sold for a bargain price. This increase their bitcoin holding, because they are buying back cheaper coins. ^lol^

That's the benefit of becoming a well creating the sell-off when there is that right bad news in order to make it a catalyst to start ramming the price down. It essentially means they are getting richer and richer every time they are creating a price dump. What shocks me the most in the article is that you only need to obtain 15 BTC in order to be included in the top 1% of the Bitcoin holders, but even though you have 15 BTC you are not counted as a whale as you cannot really manipulate the prices just yet.

[Sir Cross]

Well, this make a lot of sense. You own a significant amount of coins and you want to own more. So what do you do? You sell some coins to acquire some fiat, when the price is high and then gradually dump large amounts of coins to trigger a sell-off. The Bitcoin market is full of speculators, so they will be trigger happy to protect their investment.

When the price has dropped low enough, these whales use the fiat they acquired to buy back most of these cheap coins that are sold for a bargain price. This increase their bitcoin holding, because they are buying back cheaper coins. ^lol^

It's just an endless cycle. The rich continues to become even richer because of the power and control at their disposal. They definitely have an upper hand since they can just decide to dump at any time they want and this makes the price to go down. They get to profit when they do this because they get to buy coins at a low price then sell them when the price goes up again. This is unfair for some because they get affected as well by their actions whenever they make a dump.

[Carlton Banks]

This is unfair for some because they get affected as well by their actions whenever they make a dump.

It is not unfair, open marketplaces are not unfair. The alternative is to have all prices heavily manipulated by non-meritocratic means, as they are in the established financial markets and government subsidy system. The difference is that anyone can use their knowledge of market dynamics to accumulate profits from an open market like Bitcoin, whereas only people who suck up to those well positioned in the established market places can become market makers (i.e.whales) themselves.

This system has shielded regular people from real markets for so long that most regular people have no clue how to react to market signals in this so-called capitalist world. If all Bitcoin investors rigidly stuck to the basic sensible trading advice just on this page, there wouldn't be such a wild swings in the BTC price. It's going to be a long hard road out of this centralised price-setting paradigm that is, to all intents and purposes, little different to the communist model. All regular people got a real-time education in market behaviour for 1000's of years prior to the 20th century, when the governments of the world turned price setting into a closed shop for them and their cronies to "protect" regular people from being able to profit from market movements.

[Betwrong]

Everyone with common sense has ended up with more coins after the most recent correction/crash. I started securing profits at $15,000 and continued doing so till a little over the $18,000 level last year. I kept buying back in smaller fractions all the way down to almost very close to the bottom. If I look at my net results in terms of coin quantity gains, for every 1BTC that I sold, I have managed to buy back ~1.85BTC. The results could have been a bit better if I didn't start with buying at +$10,000 levels, but you can't exactly know how deep the price will end up going down initially. Overall, I am very happy with the results, and look forward to more if the market isn't comletely bottomed out yet.

^^^ This is a good example of that not only so called "whales" have profited from the past fluctuations. It's a free market and anyone has a chance to either profit or lose here. I don't support the notion that there's a conspiracy of any kind among the "whales" and I bet some of them lost their money too buying at $18k+ and then panic selling at $6k since there were rumors that Bitcoin can go below $4k easily with that pace of recession. I personally haven't took any advantages from the situation but what I love Bitcoin for is that I know that I did have a chance as everyone else.

[1Referee]

I personally haven't took any advantages from the situation but what I love Bitcoin for is that I know that I did have a chance as everyone else.

Correct. Regardless of your capital, you like anyone else has the chance to book the same profits in terms of percentages. The only difference is that a whale has more capital to play with than the far majority of the people in this market, so what. At some point in the future even those with 1BTC will be part of the elite in terms of how the wealth in this market has been distributed. This has nothing to do with whales, but with people knowing when and how to exploit the corrections in the right way, and as long as that is the case, there is no difference between you and a whale. It's as always the media looking to spice things up with a sensitive point like how the rich get only richer, it's already known.

[BitHodler]

Regardless of your capital, you like anyone else has the chance to book the same profits in terms of percentages. The only difference is that a whale has more capital to play with than the far majority of the people in this market, so what.

That's exactly my view. People quite often complain about how whales are manipulating the market, while they ignore the fact that the whale manipulation can work out as well for you as it will work out for them.

I am not very active when it comes to trading, but I do like to use a lowering market in my advantage, and especially if the market state is overbought to such an extent, that it is bound to correct.

I am not a big risk taker, meaning that I will only sell a small amount of coins at what I consider to be the top in that specific time frame. If I used up all my funds while buying back, I patiently wait for the market to move up again.

If the market happens to tank far deeper, I might actually wire money to my exchange in order to take advantage of that lower price, which is exactly what I did during the most recent correction