Sunday, February 5, 2023

What Is Cryptocurrency Whales And How It Manipulates Crypto Market?

If you are a part of cryptocurrency industry, you must have come across the word ‘Whales’ every now and then. In simple words, any individual or entities that own the majority of the specific cryptocurrency. With their holdings, Whales get the power to manipulate the market.

According to the market experts, Whales are one of the key factors that affect the market.

The term Whales have been derived from the traditional financial market. In the traditional financial market, the authorities used the term to refer to their traders with the highest holdings.

Many of you may ask why the individuals or entities with the largest holdings are called Whales?

Because of their position in the market. Like Whales, who are the largest creature in the ocean, ‘Whales Traders’ are the largest players in the market. These traders have the power to move the market according to their direction.

How Do Whales Manipulate Crypto Market Movement?

The Whales put a huge amount of sell order on the books which usually is lower than the other sell orders in the market. These sell orders create a panic reaction which is followed by price depreciation, this causes volatility.  

When whale feels that they have created enough panic sale, they stabilize the market by pulling off their sell orders. Now, during this process market suffer a huge loss, which benefits Whales, as it provides them the opportunity to buy more tokens at their desired price. This kind of tactic is referred to as a ‘sell wall.’

A most exclusive example of this incident is the recent market drop. Many of the individuals, especially the newbies, must be thinking that all the investors have lost their investment portfolio during this fall. But the fact is that the fall, market fluctuation, panic sale, all of these things have helped the Whales owner in getting more coins at their desired price.

Musk’s tweet did affect the market, but along with that Whales were working to bring the market down. They put the sell order for cryptos, created panic sales to bring down the market and as soon as this happened, they started purchasing more coins. 

Apart from this, Whales use other tactics in which they do things ‘opposite of a sell wall’ to inflate the price artificially. In this process, the Whales put huge buy orders on the market at higher prices. Whales bidding forces other bidders to raise the price of their bids, this way the sell orders fill their buy orders. 

These tactics create FOMO (fear of missing out) among the smaller investors, as they do not want to feel left out. Usually, the smaller investors become the victim of these tactics and they end up with smaller returns.

In the regulated stock market, these tactics are considered to be an offense, but in the crypto world, Whales use them. They have found certain loopholes which help the Whales Account holders in manipulating the market. 

Biggest Crypto Whales In The Market

Since the time Bitcoin, the world’s largest cryptocurrency according to the market cap, has been introduced, there have been crypto whales to manipulate the price movement of it.

Bitcoin developers followed the 80-20 rule, popularly known as the Pareto principle, to distribute the token. Notably, the top 20 percent of the bitcoin holders in the market have over 80 percent of bitcoin value in US dollars. 

BitInfoCharts released data of Q1 2021, specifying that out of the total circulation of Bitcoin, 7.18 percent, worth around $74 billion, is owned by the holders worldwide. Rest one-third of all bitcoins are owned by the top 100 wallet holders whose value is at $342 billion.

Market experts believe that Whales could be a problem for Bitcoin because if they do not show any movement, it lowers the liquidity of the digital asset, which could result in price volatility. However, if the whales move a large number of tokens at once, that would also create price volatility.

Apart from Bitcoin, other cryptocurrencies in the market also have whale accounts to manipulate their price movement.

A few months ago, when suddenly the Dogecoin market spiked, mostly individuals assumed that it happened because of Musk, who has been showering his affection on the meme-based coin for quite a long time. The fact is, Musk is one of the reasons for surging up the price of Dogecoin, but there had been a few other individuals behind that scene who were manipulating it.

We can not claim who all owns the Bitcoin Whales Address but with the help of the ledger, we can speculate with some certainty about the identities.

Satoshi Nakamoto- It is unknown who Satoshi Nakamoto in reality, but Craig Wright, an Australian businessman, claims that he along with his friend Dave Kleiman developed Bitcoin. However, in 2019, Kleiman’s estate filed a lawsuit against Wright for half of his reported 1.1 million bitcoin. 

If Wright does have 1 million bitcoin in his account then he definitely owns Whale Account and must be among the top three list of Bitcoin Whales holder.

The Winklevoss Twins- Cameron and Tyler Winklevoss are the crypto enthusiasts who were among the early adopters of bitcoin. As per the report, the Winklevoss brothers own more than 100,000 bitcoin in the account. If this is true, they are also in the top three list of Whales.

Tim Draper- American Venture capitalist Tim Draper is also an early adopter of Bitcoin. For just $6 he bought 42000 Bitcoin and stored them on the non-defunct platform Mt-Gox Exchange. 

Later, when Mt-Gox Exchange was compromised, Draper lost his entire holdings, however, in July 2014, the founder of Draper Venture Network received around 30,000 Bitcoins for his purchase at a US Marshals Service auction. With these holdings, he is among the top 15 percent of Bitcoin holders.
Notably, these bitcoins were seized Silk Road Marketplace website. It is the first modern darknet market which was popularized for operating illegal activities.


Like Bitcoin, other cryptocurrencies also have Whale Account holders to manipulate their prices in the market. It is not very easy to find the owner of Whale Account but the speculation could be made by analyzing the market movement and several other factors. Also, the new investors should be aware of these Whales because they could easily manipulate their investment portfolio, indirectly, and the smaller investors would not know it. 

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