- So-called “bitcoin whales” appear to have a considerable influence on the cryptocurrency market, according to a new report.
- At the same time, whales are a dying breed.
- The founder of crypto watchdog Whale Alert explains why.
It’s fair to say that bitcoin whales have a reputation for running the show when it comes to the crypto markets. Whether this is an accurate account of the role whales actually play within the ecosystem remains an open question.
With his eyes trained on every major transaction in the market, Whale Alert co-founder and CEO, Frank (who prefers not to use his last name), analyzed how bitcoin’s price flux may actually connect to these large transfers.
He disclosed his findings in a new interview with SFOX.
How Whales Move the Bitcoin Market
You don’t have to look far into the past to find evidence that these large-scale crypto traders are influencing the market.
Last month, the bitcoin price slid below $7,000, only to rally 60% to retake the $10,000 handle. While bitcoin’s predilection towards the volatile is well-documented, Whale Alert tracked several transactions that appeared related to the movement – giving credence to the notion of market manipulation.
Another instance occurring in 2018 between August 29th and September 6th witnessed one whale offload approximately $1 billion in BTC. Whale Alert caught the monolithic transaction heading from a wallet to a cryptocurrency exchange. Surely enough, a few days following the transfer, bitcoin exhibited a 15% drop, along with an increase to its 30-day rolling volatility.
Of course, the fact that these two instances occurred in a timely fashion doesn’t instantly provide evidence of causation. However, for Whale Alert, it’s enough proof to speculate on:
“Whale transactions can have a really profound effect on price in the market. […] Knowing where the currency flows is a great way of predicting stuff.”
Gauging Tether’s Impact on the Bitcoin Price
Crypto whales, as they so often do, became headline news within the community this week.
A sensationalized Bloomberg article on a year-old research report concluded that a single whale was responsible for the infamous 2017 bitcoin run. The report concluded that unbacked USDT, printed at will, had been used to pump BTC whenever it fell below a certain threshold, a relatively unfounded theory, which has circulated around the crypto space for many years.
The report was mostly debunked by Crypto Twitter’s finest. The overarching consensus remains that retail speculation drove bitcoin’s 2017 run and that the Tether-bitcoin connection is purely coincidental.
Nonetheless, according to the analyst, USDT may have had a significant role within bitcoin’s 2019 rise — but not as you might expect. During the first few months of this year, the amount of USDT issuances were tremendous. This played perfectly into the psychology of the market.
“A lot of people see those as a positive market development: they assume those USDT are going to be used to buy BTC. Now, I don’t know if that assumption is
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I have a lot of trust in USDT. Even smaller OTC brokers like JingStock started to offer it.
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