Usually, a bitcoin whale is a wallet address that has more than 1000 BTC. Those who own others cryptocurrencies in the equivalent of 1000 bitcoins are commonly called crypto-whales.
The value of a coin is largely determined by demand andoffer. In turn, a cryptokit, having a significant amount of coins, can influence the cost in its favor, putting up significant volumes for purchase or sale.
Objectively speaking, to become a cryptokit, you needhave about $10 million invested in one of the many cryptocurrencies. But basically everyone invests in BTC, ETH, SOL, ADA, DOT, AVAX, SHIB, DOGE, USDT and USDC.
The principles of anonymity embedded in manycryptocurrencies have led to the fact that addresses containing a large number of coins are almost impossible to associate with any person or organization, while there are constant movements of amounts between such addresses. At the same time, there are many people and companies in the world who have become some kind of superstars by officially announcing that they have a lot of bitcoins.
It is believed that Satoshi Nakamoto, the creatorBitcoin, owns 1 million BTC. And, for example, the Winkelvoss twins once owned 1% of all bitcoins. In addition, exchanges own a large volume, but the funds in this case belong to many users, and the movement of coins within the exchanges does not lead to market movement.
In fact, there are a lot of creep-whales, and the mostfamous among them are Michael Saylor of MicroStrategy, Tim Draper, Barry Silbert, Jack Dorsey and, until recently, Tesla, but as it became known, Elon Musk's company sold almost all bitcoins.
Tracking the actions of whales is useful for understandingmarket situation and often the publications from Whale Alert on Twitter or Telegram help with this. However, do not forget that tweets are made by people who specifically follow the movements and trade of whales, and they can be “mistaken”. So whenever you read about whale transactions on social media, be sure to research the information yourself.
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Why is a whale dangerous in crypto trading?
A legal or natural person anonymously sellsand buys a large amount of cryptocurrencies by investing fiat or digital capital in a new coin, thereby making large intraday transactions. The price of the coin is growing, interested investors are coming, and after the pump, many shrimp players are waiting for big transactions, but the whale may not “swim” for years.
However, the whale is almost always interested inbuying at a lower price. And if the whale sells, then it is better to act together with it, but this only works if you bought with the whale, but how to track it? One of the answers is the pre-sale of tokens on Launchpad, conducted by regulated centralized exchanges, where tokens of really working fintech projects are sold. Such launchpads are periodically launched on Phemex, Bybit, Binance, FTX and many others.
Do I need to watch whales?
For most people, the answer is no.Logically, this can be explained by the fact that crypto whales are interested in seeing the value of the coin grow (except when the whales plan to leave the market for some reason). Trying to ride every wave a cue ball creates can lead to a waste of time and losses. It is more important to make sure that you understand the market as a whole and follow its movements, therefore, a long-term strategy is the best tool for determining whale manipulation.
When investing for the long term, you shouldunderstand when you want to exit the market - either at a certain amount or after some event. In the case of Bitcoin, it is logical to go now and wait for the halving in 2024. In the case of Ethereum - an important event for this blockchain will happen earlier - already in September of this year, the ownership algorithm will begin to replace the mining algorithm, which will certainly have a significant impact on the value of ETH. If you trade intraday, then setting a stop loss provides protection from the actions of the whales.
Is it possible to become a cryptokit?
In general, there is no secret in becomingthere is no cryptokit, it is enough to have the appropriate capital. And despite the liquidation cascades that happened in the market some time ago with companies such as Celsius, Voyager, BlockFi and 3AC, many crypto whales continue to accumulate, as well as ordinary users. This is evidenced by statistics - the number of addresses that contain one bitcoin has overcome another historical maximum.
Trading against the whale and with it is dangerousan occupation, since manipulation is always arranged in favor of the master of the game, but understanding his actions and the ability to seize the moment is an important skill for your own investment strategy.
Author: Jeffrey Craig