The Anodyne and Nocuous Exertions of Crypto Whales.
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Greetings Friends, hope we all are fine. This publication centered on the general activities of crypto whales with more emphasis on their influence over the prices of cryptocurrencies. I believe you'll like to go through.
I wouldn't mind going first by the definition of cryptocurrency whales. These are known and unknown Investors (individuals/institutions) who hold dinosaurs of cryptocurrency in their respective wallets which also have credible influence in the overall crypto trend.
Majority of the crypto whales who have been spotted as public figures in the invention include: Brain Armstrong the CEO of Coinbase with net worth of $3.1b, this is according to google, Michael J. Saylor the executive chairman of Microstrategy with about 17,732 BTC which is about $175m, this is according to
Coinex. Next is Barry Silbert who manages about $28b BTC in his Digital Currency Group, it was also speculated that he started buying BTC from 2012 and this is according to Coinex also.
Next is another twin brothers Cameron and Tyler Winklevoss who owns about 70,000btc according to Coinex. Michael Edward Novogratz is another whale with about $250m worth of BTC still according to Coinex. Finally, we have Timothy Cook Draper, one of the early adopters of BTC who was also believed to have purchased about 30,000 BTC that was later sold by the government of US at $18.7m according to Coinex. All these are a few of the notable whales amongst other secret whales in this invention.
It is also speculated by Investopedia that out of the 19.4m BTC in circulation, about 2.8% of it is owned by four anonymous wallets while 15% of the overall BTC in circulation is staked in about an hundred wallets. This is just a tip of an iceberg to the power of crypto whales in this invention.
Hence, these whales have the power to rationally and irrationally cause great levels of instability in the crypto market just for their benefits. They may either bear the market to buy back from a very low position or probably set a high price order to sell, possibly at an oversold region given to their respective demands.
They may also cause mayhem to a particular exchange in terms of reducing their level of liquidity by moving their holdl from those exchanges to other exchanges of preference.
Nonetheless, there are different market scenarios which these whales could create in the cryptocurrency, and we'll be seeing them below. It is also noteworthy to state that although the BTC constitute a majority of the Whales, there are also other whales which hold behemoth volume of crypto in their respective wallets other than the BTC and it is established that the opposite of Whale is minnow in the crypto nomenclature which are respective wallets that holds insignificant amount of crypto in their wallets.
At this point, we'll be observing how whales have positively affected the crypto invention.
Provision of Liquidity.
Whales have contributed to the availability of liquidity in different exchanges and mediums. For instance, there are many exchanges where you can easily buy a coin but when you're set exiting from trade, it turns into an immeasurable glitch. This is as a result of insufficient liquidity in such a market.
Contrarily, whales have immensely helped in mitigating against liquidity issues through the provision of their tokens to most exchanges. Consequently, Whales provide liquidity to exchanges through probably staking their tokens, farming with their coins, trading with it and other measures.
In a more realistic scenario using the Hive ecosystem as a case study, there are two major means of providing liquidity in the system. One is by powering up your hive, Leo or any other token and secondly is by staking your HBD in savings. These are the two major means liquidity is provided to hive and in another instance, the hive ecosystem will run deficient of liquidity when there isn't enough power up of hive token and staked HBD in savings.
Price Increase.
Whales are unequivocally the game changer in the crypto market especially when it comes to the issue of price. Although there is no inter connectivity between different whales where they converge to decide on price flows, the major whales like the BTC whales have a major say in crypto price fluctuations since most other tokens have a consensus mechanism with the BTC.
Nonetheless, when BTC whales probably decide to sell their token at a peaked position, there is every tendency that every other cryptocurrency will take a bull run till the set order is filled. In essence, they help in influencing the price of the BTC and other tokens that have a consensus mechanism with the BTC to a very favorable position.
I have observed that despite the flooding of the crypto market by miners, after the whole token have been absorbed, those who accumulated it coupled with some other whales now pushes up the price by pegging to trade the absorbed tokens and their respective HODL at a higher position which makes whales more influential than miners.
They Help Minnows/Small Investors in Taking Rational Steps.
Currently, this far flaunt and accepted nomenclature in the crypto milieu has come to stay as it means smaller holders of tokens in their respective wallets. Nonetheless, we know the whales to be the cynosure in this invention and for smaller Investors to succeed, they have to circumspectly watch the actions of these whales.
In essence, through the observation of the flows of transactions in the whale's addresses, smaller investors are guided on when to HODL or possibly layoff their crypto holdings. This means that if minnows should succeed, they have to monitor and also follow by default the directions of the whales.
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At this point, we'll also be investigating the bad effects posed by these whales in the crypto sphere.
Liquidity Instability.
We have to come to terms that no investor's HODL in an exchange will stock there forever because at a point, he might be laying off a part of his asset to meet with certain personal exigencies and hence it will destabilize such an exchange if what the whale or whales intend laying off is substantial.
Consequently, most whales prefer to HODL an idle token than staking or trading with it on exchanges. This has also caused deficiencies in the provision of liquid to certain exchanges where those whales have compounded their tokens in an idle manner.
Finally, there are times when whales may wish to move their token to other exchanges or wallets other than the current exchange wallet they've been using. Through this, the exchange they moved their tokens from may be posed with deficient liquidity and hence this may finally lead to the loss of other customers.
Unfavorable Price Fluctuation.
Whales are known for their continuous fluctuation in price, and since everyone is in business to make profit, they have the simple move of always winning.
Consequently, there are other factors surrounding price of cryptocurrency, I observed through research on Investopedia that when the mean value of certain token per transaction rises above 2, the next action of whales may be to start dumping in those exchanges
When whales distort prices by dumping certain tokens like the BTC, given to an increased transactional payment in exchanges, the prices or values of other assets with consensus mechanism with it will definitely fall thereby leaving late investors with little or no profit.
Lose on The Side of Smaller Investors.
There is the tendency that smaller Investors may not always be in trend with the actions of the whales since it's not like a scalping or swing trade scenario where you probably have to keep an eye on your trade. There is the tendency they may give attention to other things aside from the whales trending market action.
In essence, smaller Investors are prone to go in for losses since they aren't the major players in the crypto market. Nonetheless, it calls for a more careful observation of the market eventualities and following news and some of those whales on X against subsequent actions.
I know that the majority of us know that nothing is hidden on the blockchain, where the miners cannot dictate certain market actions, the AI integrated in the blockchain can do it.
Nonetheless, there are credible tools we could use in tracking the different whales in the blockchain, and these tools can also help in dictating how many times a whale has moved his HODL within a year.
Hence, these tools includes but not limited to:
Whale alert this tool helps in tracking different whales on the Blockchain including Hive Whales.
Clank app this tool helps in tracking whales through their web interface, and also Web2 platforms like twitter.
Whalemap this tool also helps in tracking whales but in a more complicated way as it contains bugs of information that may not easily be grasped in an instant.
Whalewatcher this tool can be used in tracking both crypto and NFT whales. They also provide services through web2 medium using the discord.
Whalebotalert this tool is basically connected to the telegram rostrum and it is also used to track whale transactions that take place in the blockchain.
Summary of where to get these tools
Finally, these tools can help a trader to know what could be the possible market trend or action since the deduction is true that the crypto market is highly influenced by whales.
A careful observation through this article unriddles that the crypto market isn't as volatile as we think given to the whales action but their non agreement at each time may lead to high stochastic nature of the crypto trend thereby leaving in us to conclude that crypto market it highly volatile.
Whales are major players in the crypto sphere and a careful observation of their respective actions will guide smaller investors into taking rational steps while engaging in the underscored invention (crypto)
Finally, the whale's strategy should be the strategy of all since in every establishment, there must be a leader and a follower. Consequently, the crypto market will be a pleasurable environment when we get into its clime with understanding.
Please permit me to draw the curtain at this point. I believe you learnt something from my assertions. Thanks for going through, I would love to see you in my next publication bye.
References:
Summary of where I got the whale tracker tools:Learn.bybit
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Thanks for your incredible update, your work's really speaks for you. More grace to keep on the fire!! bye🙋🏻
You're welcome @davchi2, it's well deserved! Congrats on your constant involvement on Hive 😊👍
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This is a great article, all whale activities are under watch and we'l checked
Thanks for your pretty response friend, yeah this is one of the advantages of the blockchain. There is nothing hidden in the Invention. On the other hand, we can easily track the respective activities of whales using both the web2 and 3 rostrum. Nice engagement bye🙋🏻
This is quite interesting as it has to do with the leaders in the market known as the Wales, although this influence the market due to their power they have, but we can ration out some interest from the market if we observe their movement well.
You're right on point my noble friend, when we rationally follow the action of the whales, we make the best out of this invention unequivocally. Thanks for properly engaging bye.🙋🏻