Because of their big holdings, they can impact the price and liquidity of a cryptocurrency. The crypto community often watches the actions of whales closely, as they can influence the market.
Who Counts as a Crypto Whale?
A crypto whale is someone who owns a large share of a cryptocurrency’s total supply. There’s no fixed number, but generally, if someone holds a large portion of a coin’s total supply, they are considered a whale.
For example, owning at least 1,000 BTC would usually make someone a Bitcoin whale.
How Do Whales Affect the Market?
Whales can move the market because of how much they hold. If a whale decides to sell a large amount of a coin, it can increase the supply and push the price down.
On the other hand, if a whale buys a lot, it can reduce the supply and cause the price to rise.
The Impact on Liquidity
Liquidity means how easily a cryptocurrency can be bought or sold without big price changes. If a few whales hold most of a coin and rarely trade it, there’s less liquidity.
This makes it harder for others to trade the coin without causing big swings in price.
Tracking Whale Activity
Because whales can influence the market, many traders watch their actions closely. There are websites and tools that track large crypto transfers and whale behavior.
These tools can give helpful clues about possible future market moves.
Whales and Blockchain Governance
In blockchains that use Proof of Stake (PoS), owning more coins can give users more voting power on rules and updates.
This means whales can influence the direction of these blockchains.
Wallets and Whales
To manage large crypto amounts, whales use secure crypto wallets. A neutral crypto wallet helps them store, send, and receive large funds safely. Using trusted wallets and platforms is important for anyone managing big amounts of cryptocurrency.
