They are widely talked about in the cryptocurrency space: Bitcoin whales. But what exactly are Bitcoin whales and do they really control the market?
Way before the literary clash between Moby Dick and Captain Ahab took place, whales were already a sort of myth. The enormous and mysterious sea mammals are now an everyplace cryptocurrency metaphor, fueling FUD and FOMO alike whenever spotters scream: there she blows!
What is a Bitcoin whale?
The term “Bitcoin whale” is commonly used to refer to investors who treasure large amounts of BTC. A taxonomy offered by chainalysis classifies them in 4 basic types, by descending wealth: traders, miners and early adopters, lost whales, and criminals (only 3 wallets out of 32 were identified as such).
However, much of a conspiracy hype has been built around Bitcoin whales, sometimes fueled by traditional news outlets. The possibility of publicly witnessing transactions on most blockchains also tends to trigger speculations on social media, quite often after one of the many whale-watching Twitter accounts reports a large transaction. Reddit has also taken upon serious detective work on several occasions to unearth the motives behind such moves.
Watch: Remember the whale dumping 35K ETH, flash crashing it to $0,10? This is the video
Do Bitcoin whales really control the market?
There has been much of a controversy on this point. When taking a look at the distribution of Bitcoin funds in wallets, it would seem as if a large percentage of the total number of bitcoins is kept by few hands.
Bloomberg once tried to infer a situation of large market concentrations from the distribution of bitcoins in wallets. On a notably tendentious article titled “The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market”, the author engages in the following FUD-boosting argumentation line “While they (ordinary investors) can track addresses with large holdings online and start heated discussions of market moves on Reddit forums, they’re ultimately in the dark on the whales’ plans and motives”.
The writer keeps on arguing in the same direction: “the top 100 bitcoin addresses control 17.3% of all the issued currency […] with ether, a rival to Bitcoin, the top 100 addresses control 40% of the supply”.
The premise of this article is fake, as it constitutes what in science is normally called an ecological fallacy: making assumptions on individuals based on inferences about the group they belong to. Andreas Antonopoulos, Bitcoin advocate and expert author, explains it with detail on this video:
Put simply, there is no way Bloomberg or anybody else can determine market concentration just by looking at Bitcoin wallets, as this data does not correspond or even approximates remotely to the real number of Bitcoin users.
A single wallet can store funds belonging to millions of investors, and a single investor can own a million wallets.
Then, how much of an influence do Bitcoin whales have over the market?
The most up-to-date and serious research about the true nature and impact of Bitcoin whales was published last October by crypto research firm chainalysis.
Read more: Research: Whales are not destabilizing, but stabilizing the Bitcoin market
The study analyzed the 32 largest Bitcoin wallets not belonging to exchanges. First, they conclude they hold about 1 million BTC, or about 6% of the current circulating supply of 17.5 million BTC. This is perhaps the soundest estimation in so far of how much BTC is on the hands of Bitcoin whales.
Although 6% might seem as a lot, the percentage is not as high when put into the fairly similar context of stock ownership. About 6% of Apple is owned by investment firm Blackrock alone. And Bill Gates owned more than 1% of all Microsoft shares until selling most of them over the past years.
Looking at firms on an earlier stage of their public trading history, and thus more relatable to the 10-year-old Bitcoin, their shareholder concentration is even higher: Spotify CEO Daniel Ek still owns 25% of the company’ stock.
When it came to probing the real power of whales to manipulate the market by acting together, there were some surprising conclusions. As shown in the above chart, Bitcoin whales actually tend to stabilize markets, contrary to popular opinion.
During large sell-off periods, they were net receivers of Bitcoin from exchanges. A limitation of this study that needs to be taken into account is that it did not include on-exchange transactions.
Read more: 9 Bitcoin price predictions for 2019 by crypto experts
Who owns the largest Bitcoin wallets?
Per the faulty logic that considers wallets to be the same as users, if we took a look at largest ones we would be certain that Bitcoin is a highly concentrated asset. However, reality is quite the opposite.
At writing time, there were only 5 addresses holding more than 100,000 BTC. Coincidently, the 5 of them belong to exchanges (Bitfinex, Binance, Huobi, Bittrex and Bitstamp), thus fostering market pluralism as millions of users are actually behind the funds. These are also known as cold wallets, where tokens are stored for long periods of time with the premise of safety in mind, as opposed to hot wallets, used for day to day operations and often more exposed to hacks.
Read more: At what price will Bitcoin make Satoshi Nakamoto the world’s richest?
As the graph extracted from bitinfocharts shows, currently more than 70% of all BTC is in wallets which store 10 to 10,000 tokens. These group of wallets stores about 4 times more wealth than the top 100 wallets containing 10,000 to 1 million tokens, where the exchanges are also included, together with the real, but no so influencing Bitcoin whales.
Read more: A whale has transferred $193 million in btc to a $1 billion wallet. Whats to come?; $114 million worth of bitcoin transferred to suspected BitMEX wallet
Analysts Predict 30% Drop to CME Futures Gap As Bitcoin Falls Below $11,000
Bitcoin News Update – Previously, the key support level of $11,000 has been a strong region of buying pressure for Bitcoin. The top cryptocurrency dipped below $11,000 after a short period of consolidation. At press time, Bitcoin is trading at $10,980, nearly 4% down from its 24-hour highs of over $11,400. The crypto-asset has witnessed a significant drop within 24 hours. Today’s dip clearly marks an extension of the downward movement started by Bitcoin when it plunged from the weekly highs of over $12,000.
Bitcoin News Today – Bitcoin Price Analysis – Bitcoin Price Forecast – Bitcoin Plunges to $10,980
Fortunately, Bitcoin has found strong resistance at $12,000 price level. Each attempt of the coin to decisively break above this level has met violent rejections. Recently, analysts revealed that there is a high probability for a further drop in Bitcoin price in the near future. A popular crypto analyst on Twitter, Mitoshi Kaku, recently tweeted that the next key level of support for Bitcoin is $10,600.
The analyst suggested $10.1 and $10.6 as the two main levels on the macro level. He pointed out that $8.6K is almost guaranteed between 10/28 and 11/11 if the two main levels are lost.
Bitcoin (BTC) Price Today – BTC / USD
Analysts forecast a further 30% fall in Bitcoin price. According to Bitcoin Price Prediction, the cryptocurrency is likely to continue the downtrend until it fills its CME futures gap which is now in the low-$8,000 level. Consequently, the embattled investors will experience another 30% plunge before Bitcoin reverses its downtrend and begin to soar.
Bitcoin Latest Update – Bitcoin News Update – Two Gaps on Bitcoin CME Futures Chart
Bitcoin rarely leaves gaps in its CME Futures chart in the past without filling them. Currently, the crypto-asset has two gaps at $11,800 and $8,400. It is likely that Bitcoin will soon touch these levels. Another popular crypto analyst on Twitter, the cryptomist, recently tweeted about the gaps on Bitcoin’s CME Futures chart.
The Cryptomist believes that the top cryptocurrency will fill the current two gaps now. She pointed out that Bitcoin has almost filled the $10,890 gap and is left with more gaps, -11.8K and -8.4K. She explained that both gaps will be filled in the near future. It is likely that the analysts will have a better idea of which of the aforementioned gaps that will be filled first.
Bitcoin News Today – Bitcoin Price Analysis – Bitcoin Price Prediction 2019 – Key Indicators Turn Bearish for Bitcoin
The king of cryptocurrencies recorded 6% loss as it traded at $10,500 on Bitstamp on August 14. This current price erases nearly 53% of the rally from the July 28 low of $9,111 to the August 6 high of $12,325. The devaluation of China’s Yuan on August 5 may have triggered the recent BTC rally. The top cryptocurrency rallied 7% on the same day and rose to $12,325 the next day.
However, the Bitcoin drop witnessed in the last 48 hours also coincided with the recovery of Yuan. China’s Yuan, CNY, has appreciated by 0.26% yesterday and reported a 0.32% gain today against the greenback. Yuan’s recovery has forced investors who bought Bitcoin during the devaluation to cash out.
Bitcoin hourly chart shows a high-volume price breakdown which favors a dip to $10,000. Bitcoin Price Prediction suggests that a minor bounce may precede the drop to $10,000 level. Consequently, the cryptocurrency has retraced over 50% of the $3,000 rally it recorded in the 10 days to August 6. The price drop today has caused Bitcoin to look weaker than it was yesterday.
Bitcoin worth $180 million transferred between wallets in different transactions
The market experienced a surge in the number of transactions occurring between unknown wallets, as Bitcoin maintained its position above the $10,000 mark. The king coin was priced $10,413.87 at press time with a jump of 3.30% over the 24-hour cycle. As the crypto-market joined the bullish ride, the transfer of crypto coins also surged in the market.
Whale Alert, one of the web’s major cryptocurrency transaction trackers, shared the news of the transfer of 7000 BTC between unknown wallets over its official Twitter handle,
“7,000 #BTC [72,418,271 USD] transferred from unknown wallet to unknown wallet.”
BTC was transferred between the wallet address 14DHxoHYRXL9RudVAGxyzjjcPm9zCCZvXX and wallet address 1LKAwBi5Yb7LzQ5NN1NdRCXbQ8RcJkG1h1 with a timestamp of 10:14:54 UTC, 17 August 2019. The transactions were carried out with 4 confirmations. Additionally, hash for the transaction was c4b7d86168518fff669662ac33ec696751f6a7ecfb7e5d8d4b64f2255408af7d. Transaction was carried out over the Bitcoin blockchain with a transaction fee of 0.00004032 BTC. Additionally, the block height of the transaction was 590505 and it was deemed a successful one.
Previously, 5000 BTC were transferred as reported by Whale Alert,
“5,000 #BTC [51,727,337 USD] transferred from unknown wallet to unknown wallet.”
It was transferred between the wallet address 1Ehser8uNsySVCQXcnaN4MjWwFWTNasiVX and wallet address 19KFMGRaAQChPzGv2jHa5tuegMgAoq5sG5 with a timestamp of 10:14:54 UTC, 17 August 2019. The transactions were carried out with 10 confirmations.
Yet again, the crypto community’s attention was steered towards another large transaction between unknown wallets, as Whale Alert communicated about the transfer of 6000 BTC,
“6,000 #BTC [62,072,804 USD] transferred from unknown wallet to unknown wallet.”
The transaction occurred between the wallet address 1PSk8YMLYAYFfSyGjuaH7NvDZydK79ySB2 and wallet address 174dXYQXf5hw7WmwS9pHdWSNXaLfZC4wqN, having a timestamp of 10:14:54 UTC, 17 August 2019.
Bitcoin stays calm above $10,000, struggles to turn bullish
- Markets cheer Bakkt’s introduction of crypto futures on Friday.
- Bitcoin still down more than 10% for the week despite latest recovery.
- $10,000 continues to act as strong support in near-term.
After slumping to its lowest level of August at $9,467 on Thursday, Bitcoin (BTC/USD) staged modest recovery and advanced above the critical $10,000 mark. Although Bakkt’s announcement of the launch date of its highly anticipated crypto futures platform allowed the sentiment surrounding major cryptocurrencies turn positive on Friday, Bitcoin’s rally remained short-lived. As of writing, the BTC/USD pair is posting modest daily losses at $10,300. For the week, the pair is still down more than 10% despite this latest rebound.
Bakkt cleared to launch Bitcoin futures
Owner of the New York Stock Exchange (NYSE), Intercontinental Exchange Inc, said on Friday that it won the approval for its Bakkt unit to introduce futures that will pay out in Bitcoin starting September 23rd. Commenting on this development, “We believe that the availability of a benchmark that can be referenced globally will create confidence in the true price of Bitcoin,” Kelly Loeffler, Bakkt’s chief executive officer, told Bloomberg in an interview. “It’s an important step in creating more trust.”
Looking at the technical picture, the Relative Strength Index (RSI) on the daily chart continues to move below the 50 mark, suggesting that buyers are struggling to take control of the price action. Additionally, both the 20-day Moving Average and the 50-day Moving Average stay above the price, confirming the near-term bearish outlook.
On the downside, $10,000 (psychological level/Fibonacci 61.8% retracement of June rally) remains as tough support. With a weekly close below that level, the sell-off could drag Bitcoin to $9,500 (Aug. 15 low) and $9,000 (psychological level/Jul. 17 low/Fibonacci 78.6% retracement of June rally).
On the other hand, a strong dynamic resistance seems to have formed at $10,800 (20-DMA/50-DMA/Fibonacci 50% retracement of June rally) ahead of $11,500 (Fibonacci 38.2% retracement of June rally).