BTC whales are individuals or entities that own a large amount of the cryptocurrency and are said to exert influence on the market volatility. However, Chainalysis’ data reveals that BTC 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 the net, traded against the herd, buying on price declines.”
A new study by blockchain research firm Chainalysis shows that Bitcoin (BTC) whales are not responsible for price volatility. The study examined the 32 largest BTC wallets, which reportedly represent 1 million BTC, or around $6.3 billion.
In the course of the research, the firm divided the 32 wallets into four groups. The most active category consists of nine wallets belonging to traders, who regularly conduct transactions with BTC on exchanges. This group of BTC owners controls more than 332,000 coins, worth over $2 billion, but only one-third of it actively trades BTC. Most of these traders reportedly entered the market in 2017.
The second group is represented by miners and early adopters, which include 15 investors also holding a total of 332,000 coins. The trading activity of this group is reported “extremely low,” although the report states that many of them made significant divestments from 2016–2017 when BTC prices soared.
The analysis of the trading whales found that they do not intensify volatility, as during the major declines in 2017 and 2018 that were net buyers of BTC. The study further reads:
“That 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…”