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.

Etoro Is Launching an OTC Crypto Trading Desk for Institutions

Etoro Is Launching an OTC Crypto Trading Desk for Institutions


While the major banks are taking their time with offering OTC crypto trading, new entrants to the space are stepping up to fill the void. Social investing platform Etoro, which focuses mainly on retail traders, is now expanding into the institutional segment with a new cryptocurrency offering.

Also Read: This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?

New Crypto Trading Desk for Hedge Funds

Etoro Is Launching an OTC Crypto Trading Desk for InstitutionsEtoro, which recently announced that it is expanding into the US with ten cryptocurrencies, is reportedly setting up an over-the-counter (OTC) trading desk in London for institutions wishing to trade on cryptocurrencies. The platform is connected to fifteen cryptocurrency exchanges from which to pool liquidity and is also said to be planning to launch one by itself. The move is explained as answering demands from hedge fund owners who expressed interest in experimenting with crypto trading.

“We are launching an OTC desk for institutions. We’ve seen more and more interest from corporates and institutions,” CEO Yoni Assia told Business Insider. “We’ve actually set up our corporate team here in the UK to start setting up accounts to trade on eToro. We’ve announced that we’re launching the exchange as well so, between the exchange and the OTC desk, we’re also starting to serve more potential institutions and financial institutions.”

The Growing Institutional OTC Crypto Market

Etoro Is Launching an OTC Crypto Trading Desk for InstitutionsInstitutional OTC desks help big players whose massive transactions might move the markets if they were done in the open. And trading outside popular exchanges can also be seen as risk management, for trying to avoid losing funds in the case of another exchange hacking incident.

In the US, Circle Financial and Cumberland Mining operate OTC crypto services and Goldman Sachs was reported to be in the process of entering the field, although its CEO has denied the rumors. Additionally, JP Morgan and Fidelity are said to be assessing a move into the space. In the UK, Barclays was reported as supposedly considering launching a crypto trading desk back in April. And financial industry insiders, like David Mercer the CEO of LMAX, which recently launched a physical crypto exchange dedicated to institutional clients, expect UK banks would eventually join the market next year. In the meanwhile, big players have also set up their own private network for OTC trading, buying and selling billions every month among themselves via Skype.

“I think there is growing institutional demand and interest of public investors to understand whether they can join the party,” Etoro CEO Assia said. “That is something we definitely see out there. We see more and more public market players and big banks who are interested in this space and feel left out because they’re not allowed to invest in crypto or ICOs.”

Are London banks in risk of losing hedge fund to new trading desks if they won’t support cryptocurrency? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

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Regulated Crypto Exchange Itbit Adds BCH, ETH, LTC, and XLM Products

Regulated Crypto Exchange Itbit Adds BCH, ETH, LTC, and XLM Products


Regulated cryptocurrency exchange Itbit announced today that it has received approval from the New York State Department of Financial Services to add more cryptocurrencies to its product offerings. The company will begin offering custody, escrow, OTC trading, and exchange services for BCH, ETH, LTC, and XLM, in addition to its existing BTC offerings.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Approval by the NYDFS

Regulated Crypto Exchange Itbit Adds BCH, ETH, LTC, and XLM ProductsItbit announced on Thursday, June 14, that it will start offering several new products based on cryptocurrencies other than BTC. The New York-based company wrote:

Global crypto asset platform Itbit announced today it has received approval from the New York State Department of Financial Services (NYDFS) to offer expanded trading and custody services for bitcoin cash (BCH), ethereum (ETH), litecoin (LTC) and stellar lumens (XLM). Itbit will start immediately offering custody, escrow and OTC trading services for these new assets, with platform exchange trading to follow.

Regulated Crypto Exchange Itbit Adds BCH, ETH, LTC, and XLM ProductsPreviously only BTC products were available. Itbit COO Andrew Chang commented, “by gaining this regulatory approval, we are now able to open the doors for individuals and institutions to access crypto assets beyond just bitcoin.”

Itbit became the first bitcoin exchange to be granted a banking license by the NYDFS in May 2015. The license allows the exchange to operate in all 50 U.S. states under the New York banking laws, CEO Chad Cascarilla explained at the time.

Itbit’s Product Offerings

Itbit’s website outlines several services such as crypto exchange, OTC trading, and custody services. “US dollars are FDIC-insured and all fiat and bitcoin customer assets are fully protected and backed by mandatory capital reserves,” the company details. For OTC trading, the minimum investment is 25 BTC.

Regulated Crypto Exchange Itbit Adds BCH, ETH, LTC, and XLM ProductsThe exchange also offers escrow transactions. While “Itbit acts as the agent to negotiate a trade between two parties and conducts settlement” in OTC trading, it “acts as a neutral party to settle a trade brought forward by an agent or buyer/seller mandate” in escrow transactions.

At the end of May, Itbit’s operator, Paxos, announced that it had raised $65 million. Part of the funds raised will be used to operate the Itbit exchange and custodian service, CEO and co-founder Charles Cascarilla said at the time.

Last week, the U.S. Commodity Futures Trading Commission (CFTC) reportedly demanded trading data from Itbit and three other crypto exchanges since bitcoin futures provided by CME Group, which it regulates, derive their value from them.

What do you think of Itbit adding BCH, ETH, LTC, and XLM products? Let us know in the comments section below.

Images courtesy of Shutterstock, NYDFS, and Itbit.

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