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The world of cryptocurrencies has a curious set of persons- the Whales. The name is apt for the large size of their holdings, but also the waves they make on the markets. Cryptocurrency markets still have a rather low liquidity, and a big holder of coins can sway the price easily. Experts usually notice when whales move in, and they can affect the price of a coin or a token.

What Makes a Bitcoin Whale?

With the current high market price, even a small Bitcoin holding may have a significant dollar value. But one needs quite a bit of Bitcoins to affect the current markets. And whales may be growing fatter as "weak hands" sell in market shakeoffs, or just general panic.

The general definition is somewhere between 1,000 and 10,000 Bitcoin, although there are some larger private wallets. For some, a holding of 100,000 Bitcoin makes a whale. And there are talks of larger funds managing hundreds of thousands of Bitcoin, and sometimes trading them in the OTC markets, thus not affecting exchange prices.

A wider definition for any token or coin would be that a whale is within the top 10% of wallets.

Whales Everywhere

At the beginning of 2017, Bitcoin holders were the only significant whales. But now, Bitcoin is under 50% of the whole market- and there are altcoin whales that also carry significant wealth.

For newer projects, the wealth distribution graphic serves to assure that there are few big whales, and the token sale is fairly distributed. Big holdings usually belong to the dev team or treasury, with a stipulation on spending. Such limitations ensure that "Whales" will not act just based on their influence and wealth, and skew the market price.

Whales and ICOs

For some of the earlier and hotter ICOs, Bitcoin whales were almost the only buyers. They went ahead and poured their coins, mined or acquired cheaply, to diversify their holdings. Purchasing altcoins, tokens and ICO tokens is a way for Bitcoin holders to diversify and get returns without cashing out and leaving the world of cryptocurrencies.

More recent ICOs are creating rules to cap sales and distribute tokens more widely. But still, large investors with vast amount of Ethereum or Bitcoin are still an important factor. Given that ICOs gather somewhere between 5,000 and above 14,000 Bitcoin, even a smaller "whale" or a dolphin could boast a larger wallet and potentially affect the market price, especially in thinly traded tokens.

Whales and Publicity

Whales also often double up as community leaders, educators and work to popularize cryptocurrencies. Sometimes, they simply refuse to cash out and instead devote their suddenly acquired wealth to continue to expand the cryptocurrency market.

Whales, Dolphins, Sharks, and Minnows

These are some of the types of players. Minnows are the beginners, with only small holdings, swayed by market movements. Dolphins are backers with significant holdings. And when it comes to tokens and ICOs or other new projects, big holders turn into sharks, actively manipulating the token price. That is why it is good to look at wealth distribution for a new project, to see the potential for manipulation.

Also, there is the concern of large wealth in fiat entering the cryptocurrency markets to manipulate prices. As time goes on, there are fewer of the original whales coming in from the crowd of enthusiasts and early adopters. It is also easy for a large entity to buy up and manipulate many coins or tokens.

The Story of Bear Whale

The story of Bear Whale is of a single order of 30,000 Bitcoin sold in late 2014. Instead of depressing prices, the order was mopped up within 24 hours, and the price of Bitcoin reached $375.

The trades were recorded on video which can be seen here.

Later, BearWhale went on to explain his actions on BitcoinTalk forums and Reddit, stating he just wanted to cash out, but then bought more Bitcoin again at $1,000.

Steemit: A Tale of Whales

One blockchain project that illustrates whale influence beyond market price is the Steemit platform. Older users and big holders of Steem, Steem Dollars and Steem Power. Whales can use their holdings to influence the fame and payout of other users by up-voting their posts.

Whales and Investing

Whales may be a positive or negative effects, depending on your investment strategy. In trading, their force may be unstoppable. But when it comes to supporting a project, a whale may have a positive effect on price confidence and influence the market by refusing to sell.