Chainalysis Finds That Bitcoin Whales Are Not the Sole Source of Market Volatility

Data from a detailed Chainalysis study found that Bitcoin whales may actually function as a stabilizing force in the market.

Who’s in Charge of the Market?

A newly published study from Chainalysis makes a strong case that Bitcoin (BTC) 00 whales are not the shadowy culprits behind the notorious volatility associated with Bitcoin and the wider cryptocurrency market. The blockchain research firm reached this conclusion by analyzing 32 of the largest bitcoin wallets, which contain a total of 1 million bitcoin worth nearly $6.3 billion.

To date, the general assumption among many traders has been that bitcoin whales impact price action by exerting their inordinate influence over the entire cryptocurrency market. Surprisingly, Chainalysis’ research goes against this common assumption by revealing that the ranks of bitcoin whales are comprised of “a diverse group,” and less than a third are actually active traders. Data also showed that these ‘trading whales’ displayed a tendency to accumulate on price declines rather than function as the sole force responsible for causing sell-offs.

Close analysis of the “trading” whales suggests that they do not significantly contribute to volatility as:

Net activity demonstrates that trading whales were not selling off Bitcoin in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market…

Recent data from a separate study also shows that bitcoin whales and institutional investors often prefer to buy and sell cryptocurrency using over-the-counter (OTC) transactions instead of dumping large amounts of cryptocurrency on a variety of exchanges.

Whale breaching and diving.

Apparently, there are only 4 Whale Species

By dividing these 32 wallets into four groups, Chainalysis was able to determine that nine of the wallets with more than 332,000 coins were controlled by traders who sprung up around 2017 and this group made regular transactions on exchanges. The second group of 15 wallets comprised mainly of miners and early adopters in charge of 332,000 coins was relatively action-free except for the occasional sales when bitcoin prices skyrocketed from 2016 to 2017.

Chainalysis concluded that the two remaining groups consisted of three wallets belonging to “criminals” in possession of more than 125,000 coins and forever “lost” wallets and with a coin value of more than $1.3 billion (212,000 BTC).  

Facts Help the FUD Dissipate

The Chainalysis report provides a fascinating insight into the detailed movements and holdings of bitcoin whales and in a market that is heavily driven by rumor and speculation, a bit of solid research that shines a correct light on market misconceptions is always a welcome treat.


On the topic of rumors, manipulation, and whales, surely the crypto-verse will wonder exactly which whale just moved
15,220 ($100,317,283) from between wallets.

Do you think Bitcoin whales drive the market — or is the Chainalysis report a better explanation for what moves the market? Share your thoughts in the comments below! 

Images and media courtesy of Shutterstock, Twitter/@WhaleAlert.

Almost 55% of Bitcoin Distribution are Concentrated in Million Dollar Wallets

Whale alert

With each passing day, the theory of Bitcoin Whales manipulating the market is gaining strength. According to a research study published by Diar, it shows that almost 55 per cent of Bitcoins are stored in million dollar wallets. At current rates, if an individual holds a slightly less than 200 coins, it can easily be classified as million dollar wallet.

Diar has given out many such specific data relating to the distribution of Bitcoin in its research study which is as follows:

  • 25 per cent of coins are held by long-term investors, specifically known as hodlers
  • Almost 30 per cent of coins are either lost or cannot be traded
  • 17 per cent of Bitcoin holdings are just for the speculative purpose
  • 13 per cent holds it as a transactional currency
  • 15 per cent Bitcoins are stored in exchange wallets.

The study showcases how uneven distribution of the Bitcoins are, which again raises the red flag about its decentralised structure. The large figure of lost bitcoins is also a concerning one as it will never get retrieved, and will affect the supply-demand equilibrium.

It’s not clear, how the Bitcoin prices will move in the future but for sure, currently, the prices are driven majorly by investors those who are practising the buy and hold investing strategy. Many analysts have already opined, how Bitcoin Whales are manipulating the market which is going to have a negative impact over the long period of time.

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A Finance Professional and Crypto Enthusiast

Whale Alert: A Mysterious Bitcoin Wallet With $720 Million in Balances Has Suddenly Woken Up After 4 Years

Whale alert

Financial markets have almost always operated on one particular philosophy: Survival of the fittest. This has been proven time and again in legacy financial markets, and now it’s being proved in cryptocurrency markets as well. In last few months prices of cryptocurrencies fell sharply, wiping out almost two-thirds of the total market cap from the global crypto market. Then a few days back as soon as the market was trying to recover from losses, things went south once again and a sharp decline was recorded in prices of Bitcoin as well as other cryptocurrencies. This happened without any news catalysts, which made the whole development even more puzzling. Now, however, some people claim to have found the reason.

According to CCN a mysterious crypto wallet holding more than $720 million in Bitcoins is behind this recent bloodbath of cryptocurrency markets. The wallet was in hibernation since last 4 years, but it has woken up all of a sudden in the recent days. And now the mysterious owner of this wallet is dumping the large number of Bitcoins held in it, thus creating the ruckus in the entire crypto market. There’re a total of 11,114 Bitcoins in this wallet, which represent 0.52% of total Bitcoin supply.

Redditor sick_silk noticed the sudden movement in this wallet sometime during the last week of August. By tracking every transaction in detail on the Bitcoin blockchain he/she figured out that either this wallet belongs to some user of now-defunct online black market Silk Road, or this is some old Mt Gox wallet. This second theory was also backed by Bitcoin Security Specialist WizSec.

Whoever controls this wallet now is not dumping the entire stock of BTC at once, which would have been a fool’s game. Instead, the transactions are being broken down in chunks of 100 coins with help of subwallets. More than $100 million have been dumped in these chunks of 100 coins over the course of last few weeks, which might’ve led to the prolonged bear phase. If the intention of this whale is to dump his entire stock then we’re probably in for a very long bear phase.

In the meantime, however, mainstream media keeps pumping the price of Bitcoin by telling people that now is the right time to buy. So while there will be Reds in the days to come, occasionally we may also see some Greens.

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