“Crypto whale” is a term that one will encounter on any discussion board or forum about trading and investing in cryptocurrency, and despite the imagery it summons, the term simply refers to a blockchain wallet containing a significant amount of digital assets. These high-value wallets belong to people, of course, who have somehow accumulated a lot of cryptocurrency and now hold it in situ. Whales carry a big stick, and when they buy or sell will make splashes in the market that can upset the trajectory of smaller traders.
The notion of a whale is unique to the cryptocurrency market. Whether from diligent mining, a savvy purchase of cryptocurrency at low prices, or a successfully funded blockchain project, these wallets were first-movers in the pivotal phases of the sector’s growth. Now, another of those phases may be unfolding. Being cognizant of the whales swimming deep below and learning to think like them will ensure you establish a sturdy foundation, especially as the cryptocurrency market reaches one of its most opportune points in years.
Bagging and Tagging Whales
We can track the largest blockchain wallets in the world, thanks to the inherent transparency of the ledger. Most blockchains like Ethereum have an explorer panel which is accessible through a website, allowing visitors to read all transactions and track the chain’s wallet addresses and their balances. Pay attention to the news of a large wallet balance moving to an exchange—this could mean the whale is ready to dump their coins for fiat, putting intense downwards pressure on the market.
The current market is interesting for whales because at these low prices (near 80% losses on most tokens from highs), there is much more upside than downside, so “hodling” is the name of the game. We don’t see many large BTC wallets offloading their balances lately, as most whales have already taken profits at some point in the last 1.5 years and can both enjoy them, leave cash on the exchange ready to buy on the way back up, and also keep a hefty balance leftover from the prior runup. After all, the whale mindset is a maximalist one: the best way to wealth is to acquire as much crypto as possible over the long-term.
The maximum accumulation strategy is one of the most optimistic ones but also happens to be most pertinent, with the math showing time and again that holding is the best move concerning crypto assets. Deflation and growing demand for crypto means prices move steadily upwards on the longest timeframes, and this is the perspective from which whales operate. In 2011, the bottom was found around $2.20 after an all-time high of $29.00. In 2015, the bottom was found around $150 after an all-time high of $1,200. The same sentiment prevails at $3,950—a price unimaginable three years ago. Given observable trends, it is not difficult to see that in 2021 or 2022, a $3,950 BTC may be considered a relative bargain.
With fundamentals looking fantastic on legacy cryptocurrencies and their blockchains and technical analysis indicating near-bottom prices, whales can see the future unfolding and act accordingly. Retail traders should catch onto the hesitance displayed by whales’ fitful wallet movements and historical price patterns. It may not be possible to acquire tens of thousands of Bitcoins for pennies on the dollar anymore, but there are countless opportunities to be a timely investor or foundational participant in the blockchain ideas of the future.
Being a Whale in 2019
With promising cryptocurrencies like ETH down 90% from highs, accumulation season has begun. Traders who buy while prices bounce around at these levels are to become the whales riding the next wave of adoption and have new ideas to invest in that are still growing. Ethereum is a great example as it has so much raw potential, and just now begins to prove its value with decentralized applications and an incoming move to Proof of Stake. This will allow people with 32 ETH to become a processing node in the network and earn fees. Issuance reduction is a part of this upgrade and so those who save their ETH now have a chance to be big fish in this growing pond, and someday whales themselves.
Regardless of the token, tools available to those with a crypto-heavy portfolio are getting more and more sophisticated in 2019. People with a lot of crypto and those accumulating recognize the value of hard wallets such as the Trezor, which keeps their permanent holdings safe and offline. Maintaining perfect visuals over investments is key, and a new generation of blockchain financial services allows holders to track their crypto portfolio, regardless of wallet choice or how hot or cold they are. Decentralized lending platforms enable safe passive investment for held cryptocurrency, while projects like Maker help whales leverage the value of their trading stacks.
With dazzling new utilities being released on the blockchain even during this lull in prices, paying attention to which IEOs and dApps are receiving high retail investor interest, for example, means establishing an advantageous position in the market right now. This is being comprehended by countless retail investors, institutions and private companies, and even governments seeking to escape or circumvent sanctions.
The next bull market will undoubtedly deliver enormous potential, and so becoming a whale in the future will be an expensive proposition, because the ideas that are just beginning to absorb value from the various corners of the ledger will have already gone through the most volatile—and lucrative—stages of their evolution.
The next bull market will undoubtedly deliver enormous potential, making it that much more an expensive a proposition to become a future whale. Ideas that are just beginning to absorb value from the various corners of the ledger will have already gone through the most volatile—and lucrative—stages of their evolution. Early movers are now along for the ride, and the expansive upside potential.