Crypto whales: friends or enemies?

The final weeks of 2024 saw legacy cryptocurrency wallets waking up and transferring tens and hundreds of tokens to exchanges or other addresses. Public curiosity is not the only effect of such transactions. Let’s see how whale transactions affect the market and why not everyone is happy with them.

Whale transactions Christmas frenzy

On December 25, 2024, the Bitcoin wallet had been kept untouched for approximately 14 years Move 20.55 Bitcoin to another address. During the years of their existence in the wallet, these coins have gained a value of over $2 million. Same day, different wallet Released 210 BTC after ten years of inactivity. This BTC stash grew by $20 million while it was held.

Two days later someone came Move 1,940 ETH from pre-mining address to Coinbase. These Ether tokens have been dormant since the launch of the Ethereum network. The following days saw other huge transactions involving long sleepers.

For example, on December 29, it was reported that someone sent 7,000 BTC from an address that had been inactive for seven years to several different addresses, splitting the amount into seven outputs of 1,000 BTC each.

Reporters share the view that these bitcoins were not sold; They have just moved to other wallets. In seven years, the value of a stash of 7,000 bitcoins has increased by several hundred million dollars. On the same day, a title that had been silent since 2014 sender 357.4 BTC to other addresses.

When whales hold

As of December 30, 2024, there is Four wallets It owns approximately 650,000 BTC, which is more than 3% of the total supply. All of these addresses are cold wallets for cryptocurrency exchanges. According to Bitinfocharts, less than 100 Bitcoin addresses hold about 15% of the total supply; Many of these addresses are likely owned by individuals. If they decide to transfer millions worth of cryptocurrencies, it could lead to a bearish reversal even to the upside.

When whales hold their cryptocurrencies, they reduce their liquidity. Just think of cryptocurrencies worth billions that haven’t moved in years! Nearly half of all bitcoins are held in wallets that contain between 100 and 10,000 bitcoins in balance. This group of whales affects liquidity and value more than others. Many of them have not transferred cryptocurrencies for years, sometimes more than 10 years in a row, effectively keeping large amounts of cryptocurrencies off the market.

When you sell whales

When whales dump their cryptocurrencies, they signal to other investors that a person with millions of dollars worth of assets has decided that the asset is no longer worth it. And everyone sees it!

Whale transactions do not go unnoticed. Thanks to the transparency of the Bitcoin network, these addresses are known, listed and monitored. Every huge transaction makes headlines and sparks a lot of talk on the Internet. Some people, especially those who don’t follow a trading/investing strategy or don’t even have one, get caught up in emotions and start to panic. When many people panic at once, they may turn the market around or increase price volatility – not necessarily for a long time, but still. Whales that do not want to cause inconvenience are gradually disposing of their cryptocurrencies.

Most of the transactions described in the previous chapter seem to have one goal – owners transfer cryptocurrencies from old Pay-to-Public-Key-Hash (P2PKH) addresses to modern wallets that offer better privacy and security. This cannot be attributed to the so-called “whale dumping” which acts as a bearish signal.

Alleged market manipulation

On December 27, 2024, Robert Kiyosaki, author of “Rich Dad Poor Dad,” took to X to accuse BlackRock CEO Larry Fink of abandoning Bitcoin. According to Kiyosaki, BlackRock “is lowering the price of Bitcoin, so that whales can buy Bitcoin for less than $100,000.”

Although we have no evidence to support or refute Kiyosaki’s claims, we must acknowledge that institutions and individuals who own large amounts of cryptocurrencies are often subject to such claims. the Alleged market manipulation This case conducted by Tether is one of the most famous. The battle for the truth continues from December 2024.

Why would someone accuse whales of intentional price manipulation? First, whales can actually influence prices. Whales may sell a large amount of Bitcoin, causing the price to fall, and buy back what was sold during the bounce at a discount, enjoying the profit generated by the price differences. Other tactics available to whales include pulling the rug and washing the trade.

Ripple Labs has admitted to using trading bots in the past. However, it does not fully agree with the accusations of using it to manipulate the price of XRP.

Crypto whales: friends or enemies?

Just like natural whales in the oceans, crypto-whales are neither friends nor enemies. Rather, they are large bodies concerned with their own affairs. If we know how much influence they have on the market when they spend cryptocurrencies, we can respond to whale alerts accordingly and avoid problems. The only exception is whales intentionally manipulating prices. But the same means, which are preparedness and caution, may also save us from them.