Blockchain research firm, Chainalysis proved that Bitcoin whales are not responsible for the price volatility. Bitcoin whales are referred to as big money Bitcoin (BTC) players who have the power to control the Bitcoin market.
Examination of the 32 largest BTC wallets were studied. Together the 32 wallets hold 1 million BTC.
The study revealed-
“Bitcoin whales are a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on net, traded against the herd, buying on price declines.“
During the study, the whales were divided into four groups. The first group consisted of 9 wallets and noted as active traders. There was a total of 332,000 BTC amongst this group. Most of the group were new in the cryptocurrency market with entries only in 2017.
The second group consisted of 15 wallets and was miners or early adopters. There was a total of 332,000 BTC in this group, with no activity in trading amongst them.
The third group was lost whales while the fourth were criminals. Both groups combined contained 212,000 BTC. Most of these two groups have not transacted due to loss of private keys or being connected to the dark market during times of Silk Road.
In conclusion, Bitcoin whales only added to their wallets during 2016 and 2017 when they noticed price rises thus it was confirmed that these whales could not have created volatility.
The only group which could have made a difference in the markets are the trader’s group. Significant manipulation could not take place as the trader group is only a small percentage of the total whales in the Bitcoin community.
In fact with the high amount of Bitcoin held by the whales it shows that the whales keep the market stable. This group of whales even keep the prices high by buying and not selling BTC.
Overall the whales in the study control only 6% of the market, with 4.6% either lost or inactive. The remaining 1.4% prefers buying and helping Bitcoin’s overall price level and thus not subject to volatility.
Image Source – Flickr
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