The number of bitcoin whales has reached a new all-time high against the background of the BTC growth. According to Glassnode, there are now 94,000 BTC addresses containing over $ 1 million worth of bitcoins.
It is worth noting that it is not known whether 94,000 entities are behind these addresses or whether the big whales hold large chunks of their assets at separate addresses. Due to the anonymity of the network, a whale can easily create multiple addresses to break down its assets.
Researchers claim that around 1.1 million BTC are controlled by Satoshi Nakamoto, the creator and first bitcoin miner. The vast majority of coins believed to be Nakamoto’s have never been moved.
The emergence of new addresses with large volumes of BTC shows that, despite the price increase, whales continue to buy the flagship cryptocurrency.
However, it is worth keeping a close eye on the number of bitcoin whales. Since if the whales start selling or taking profits on large positions, the price of bitcoin may undergo a serious sell-off.
During the recent bull cycle, the number of whales has increased markedly. This differs from previous bull cycles, when the number of addresses containing 1,000 to 10,000 BTC decreased.
The new rise in the price of bitcoin and the number of active addresses indicate a positive market attitude towards cryptocurrency. This could be a sign that Bitcoin has not yet exhausted its growth potential.
According to a cryptanalyst Willy Woo, many wealthy investors see Bitcoin as inflation hedge.
Despite this, the risk is still great.
Who are “whales” and are they a threat?
Whale Alert calls “whales” anyone who can cause price fluctuations by manipulating their assets. It can be both an individual trader and a company that stores crypto assets for huge amounts. Trading platforms that periodically transfer large sums to various wallets can also be whales.
A peculiarity of the cryptocurrency market is that information about transactions in many blockchains is completely open. Thus, traders and crypto enthusiasts have access to information that in other markets can be considered insider.
The potential market impact of early adopters of bitcoin can be very large.
For example, in 2018, a large player transferred bitcoins worth about $ 1 billion from one address to several exchanges for subsequent sale. With most of the whale’s assets already sold, the price of BTC fell by almost 15%. So, its 30-day volatility increased by 25%.
Even if large cryptocurrency companies move assets between their own accounts, it can still put significant pressure on the price. Information about any movement of funds with some delay captured by social networks and the media. This raises doubts among crypto investors. Traders’ fears are usually associated with the fact that a huge amount could be traded on a major exchange, triggering a market crash.
On the other hand, crypto players are pinning their hopes on new institutional investors. Who can make the market less volatile and prevent the long-term upward trend from breaking.
So, if the popularity of Bitcoin continues to grow among large investors and the number of whales increases, further growth in the price of Bitcoin will not take long.
Although, given the fact that the cryptocurrency market often undergoes corrections, and given the high funding rates, the likelihood of a correction in the short term remains high.