The Term Whale When It comes to Finance:
In Particular, Bitcoin and Cryptocurrency
The term whale refers to an individual who holds a massive amount of Bitcoin or other currency. Whales hold enough of any particular currency that they can cause changes in the valuation of that currency. Some whales even manipulate markets to cause a market to soar or to fall.
Very early use of the word Whale was in the gambling industry, where people who would wager thousands or even millions of dollars in a single night were called Whales. One would win untold wealth while the rest lost all they had for that evening of pleasure.
There are whales in all markets, whether it be Bitcoin or fiat money markets, but centralized markets have rules and guidelines to stabilize them and make them less volatile. This centralization allows these whales to hold on to many markets with a death grip, so no one else can make much of a profit.
An example of the richest whale on the planet, the one who influences even the United States Federal Reserve Board, is the Rothschild family. The Rothschild family does not measure their wealth in billions but trillions in finance and assets. This family, like the Medici before them, controls countries.
So what about whales in Bitcoin and cryptocurrency? Since Bitcoin is relatively new to the world of finance and there are both centralized and decentralized platforms, one should ask the question; Does the whale make a difference in that particular coin’s volatility? The answer is still yes. The whale can influence that coin if he or she holds a big enough share.
Suppose a whale decided for whatever reason to sell all of his holdings of Bitcoin all at once? What would happen? Bitcoin would go down in price in a big way because this one person just flooded the market with many available coins. Just like rare fiat coins go up in value because there are very few of them, so does any currency market if few are available. The same goes for those who hold their coins; the value goes up because very few are available.
The largest whales in Bitcoin are Satoshi Nakamoto, the Winklevoss twins, Tim Draper and Barry Silbert.
Who Satoshi Nakamoto has not been satisfactorily solved to date, but is it currently thought that Craig Wright might be Satoshi Nakamoto. An Australian businessman who claims to have created? Bitcoin, with the help of Dave Kleiman. Wright is said to hold 1.1 million Bitcoin, which puts him as the biggest whale.
Cameron and Tyler Winklevoss hold approximately 115,000 bitcoins, which puts them up there as whales.
Tim Draper, a venture capitalist, bought into Bitcoin early and bought 42,000 at just $6.00 each. Then much later, they went to a U.S. Marshals Service auction and bought 30,000 more coins. With all of his many ties to tech and crypto, he is a serious influence.
Barry Silbert went to the same Marshals Service auction Draper went to and took home 48,000 coins. That is not it for this man, for he is invested in 75 cryptocurrency-type companies. Barry is also the owner of CoinDesk.
The important thing is that whales have a great influence on the market’s volatility. They can cause it to fluctuate wildly up and down, just according to what they need it to be at any given time.
A rule says 20 percent of bitcoin holders have more than 80 percent of bitcoin value in U.S. Dollars. BitInfoCharts says, just three bitcoin wallets hold 7.39 percent of all the bitcoin in circulation. In 2020 the top 100 wallets held 31 percent of all bitcoin, with a value of $1.7 billion.
So do you now understand the term; Whales? They are the biggest fish in any particular pond!