Anyone who is active in the world of cryptocurrency and blockchain may have heard of at least one word "cow whale", a term that appears primarily in tweets (CT) associated with cryptocurrencies to describe a large number of specific Larger cryptocurrency.
Usually, the founding team of a project will become a "big whale", such as the founder of Bitcoin, Nakamoto, whose address contains about 1 million bitcoins. Nakamoto has also jumped to the 44th place in the world's richest list.
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Twitter is a huge source of information, but occasionally it is used by so-called influential people who often describe themselves as whales holding a specific cryptocurrency. Although these people may (and especially during the ICO fever) lie and confuse early adopters, blockchain trading will not lie. Although the era of ICO fanaticism has passed, we have seen IEO become a new trend in the industry, and whales and Twitter economists have reappeared!
Giant whales typically have resources such as research teams, data analysts, and quality referrals from early start-up projects. Tracking their transactions can provide investors with useful reference information to help them learn from investment mistakes and prevent serious consequences.
We analyzed a large number of top whales in the top ten cryptocurrencies to understand their trading behavior. It is worth noting that many of these wallets are not individuals, but investment entities and exchanges, so we narrow the research results to the individual investors we find based on transaction volume and trading behavior, despite the fact that such indicators The result may be fragmented.
In the financial world, there is a well-known rule that “Put one's money where one's mouth is”, meaning that only those who recommend a project and really invest in it are trustworthy.
As a public ledger, the blockchain is openly verifiable, so we believe that tracking the whale's investment behavior can bring opportunities and lessons to cryptocurrency investors compared to social media.
One source for tracking such transactions in real time is a Twitter account called Whale Alert that tracks BTC, ETH, XRP, USDT, EOS, XLM, NEO, TRX, XTZ and the top 100 erc20 tokens. Amount of trading.
A single large transaction may make retail investors more confused, because the broadcast of 40,000 ETHs to the exchange is more likely to cause retail investors to invest in erc20 tokens instead of selling, so real-time monitoring of cryptocurrencies The behavior of whales is unlikely to produce specific effects. Other tracking tools include, but are not limited to, the open source project WhaleWatch, which sends real-time notifications for each related transaction. According to Chainanalysis, whales were identified as individuals with more than $56 million in bitcoin.
Thinking 1: April 2019 witnessed the awakening of the cryptocurrency giant whale. During the investigation, the purchase of whales increased after reaching a record high in November last year:
After analyzing the volume of transactions in the past six months, although November is the busiest, we noticed an increase in the purchase of giant whales from mid-April to the end of April, which may mean a breakthrough in the long winter.
A similar chart also shows that whales accumulate more cryptocurrencies through the sale – which makes the industry more centralized – which means that, to some extent, they protect the market, and retail investors have Proven to be in a weak position.
Of course, this is the theoretical basis for a reverse investment trader. The Reverse Investment School (which can be bought when everyone panics) originated in the 18th century British Baron Rothschild. After the Battle of Waterloo, Rothschild bought a lot of assets with a panic about Napoleon.
Research firm Weiss Ratings reported that during the January and February 2019 price declines, 100 wallets with the most bitcoins accumulated another 150,000 bitcoins. They are probably doing this to sell at the highest point and then buy it back at a lower price as suggested by the analyst company.
Thinking 2: Bitcoin whales do not pose a major threat to cryptocurrency prices
Chainanalysis divides whales into three distinct categories: criminal whales, early adopters whales, and trading whales.
One of the findings is that the average amount of BCH whales is about 250% of Bitcoin whales, indicating that this cryptocurrency is more centralized.
The currency of the cryptocurrency whale is currently less than 10% of the total market value of Bitcoin. If they unite for a sell-off, it will actually cause prices to fall, but given the fact that as many as 2.5 million bitcoins are changing hands every day on the exchange, the impact is minimal.
Most of the giant whales that sell bitcoin want a lower entry point – buy at a lower price and try to increase their holdings. Chainanalysis cites the findings of the same report, arguing that criminal whales that make money through the dark-net market are not as active as trading whales, which is why they only use the wallet when necessary to avoid leaving any trace.
Morgan Stanley explained in a report that despite the decline in demand from retail investors, cryptocurrent whales will still invest in over-the-counter trading. At the same time, the over-the-counter trading platform Circle claimed that they handled more than 10,000 over-the-counter transactions in 2018, with a monthly transaction volume of $2 billion.
On the other hand, a Reuters report mentioned that in April 2019, bitcoin prices rose to $5,000 because of the mad buying of 20,000 bitcoins in Coinbase, Kraken and Bitstamp.
Thinking 3: Bitcoin whales participate in new blockchain project financing through IEO and donate to charity
Through an analysis of recent transactions, we found that bitcoin whales are investing in IEO. For example, the whale was recently attracted by a blockchain investment service called Roobee, which uses artificial intelligence to provide transparent publicly verifiable statistics to help investors build and manage their portfolios.
The startup recently announced that a well-known whale wallet has invested $1 million in bitcoin. The whale also wrote "I trust RooBee" in the transaction signature.
It is worth mentioning that bitcoin whales are not only looking for investment opportunities, but also supporting charity. The most well-known example is the Pineapple Fund, which donated $55 million worth of bitcoin to charities. Because they think that "once you have enough money, money is not important."
The Pineapple Fund is a charity experiment using cryptocurrency wealth and received over 10,000 support applications from different charities. Their website lists a variety of anonymous bitcoin whale donations.
Reflection 4: It is not an easy task to get a shot after stealing cryptocurrency from a whale hacker
Some hackers stole more than 100,000 bitcoins from Bitfinex in 2016, and only recently began to transfer 550 stolen bitcoins, which have not yet been recovered. Many people are paying attention to stolen cryptocurrency dynamics. Reddit user Jankeldidi found that stolen coins worth nearly $3 million started moving in April 2019 and were moved to multiple addresses.
As Adamant Capital concluded in a research report published on April 18th, Bitcoin whales hoard more and more cryptocurrencies. Analyst Tuur Demeester said that if we want to use a word to summarize current market sentiment, that is hope. The same report also pointed out that additional risks that may affect cryptocurrency prices are bitcoin exchange hacking, technical failures, macroeconomic downturns, cryptocurrency forks, and potential regulatory strikes.
Market volatility has led to the transfer of asset ownership from “weak hands” to “strong hands”, only they are able to cope with volatility and falling prices. Advances in the financialization of Bitcoin will drive more institutional investors into the industry, the most notable of which will be Nasdaq Bitcoin futures and Bitcoin futures on the Chicago Mercantile Exchange. Goldman Sachs also invested in the encryption hosting company BitGo, and Fidelity digital hosting services are coming soon.
Bitcoin whales seem to be more willing to HODL and committed to the long-term development of the industry.