Crypto whales have been the subject of many cryptocurrency discussions. The main reason behind it is that a whale can have a huge impact on the crypto market. Some say that most minor scale investors’ future depends on their hands. What is the exact background of those sayings? How could they force changes in the crypto market? The points are in the text.
Who are the Crypto Whales?
In general, the term “Crypto Whales” are referred to as investors who hold a considerably higher number of cryptocurrencies. Within the industry, they are considered “powerful investors.” They own enough money to make potential changes to the industry with their power. If a sudden fluctuation occurs in the statistical values of the crypto industry, it might be direct impact of whales.
What is the impact on the crypto market?
As mentioned in the upper section, price rising or falling can be a result of the act of a whale or a group of whales. For instant, if 10 whales get together and make a decision to sell their coins. This would result in a calamitous drop since they would immediately repurchase their coins after selling them. Then they make a huge profit and again purchase coins at a lower price. What happens here is, they artificially create an unnecessary demand within the industry. But actually, it is the backstage companionship of a few powerful invisible hands who are known as Whales. With the continuation of this process, the whales keep gaining profit and it keeps influencing the liquidity of the industry. Another possibility is that if the seller is attempting to sell bitcoin for state currency, the lack of liquidity and large transaction size may exert downward pressure on the price of bitcoin as other market participants notice the transaction and attempt to sell as well, resulting in a fire sale. A fire sale is a scenario where items are being sold at a huge discount. These facts might end up with market distortions and many unexpected circumstances.
Becoming a Crypto Whale
Though the whales act a bit dark, becoming a whale implies a huge amount of assets in your account. But it is not necessary to be a rich person. There are multiple ICO projects which are selling tokens for affordable amounts. While the value of the token is increasing according to the development of the cryptocurrency, you will automatically become a whale with your current assets.
- The above discussion is neither financial advice nor financial recommendation. It is a basic study on cryptocurrency which is done based on resource sources. Therefore, our team accepts no responsibility or liability for any predictions/decisions you make in the industry.