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If you have spent time researching and reading about cryptocurrencies, you will likely have come across the concept of a crypto whale. As with many other crypto-related terms, whales can be difficult to understand for newcomers to the industry.
Before you<a href="https://www.kraken.com/learn/buy-ripple-xrp" target="_blank" rel="noopener noreferrer nofollow"> buy XRP</a> or invest in Bitcoin, it’s important that you have a solid grasp of the terms and language used in the world of crypto. In this article, we explore crypto whales, explain what they are and discuss why they are so good for the crypto ecosystem. Let’s find out more.
What are Crypto Whales?
The concept of a crypto whale is actually much simpler than it first seems. Essentially, whale is a term used to describe an investor who has purchased and stockpiled an extremely large quantity of any given cryptocurrency. The volume required to be classed as a whale is much larger than what the average investor or trader could afford. In fact, these volumes are so large that crypto whales can actually affect market conditions.
If you think crypto whales are a rare phenomenon, think again! They are more common than many people realize. Bitcoin is the perfect example, with 15% of the currency currently in circulation held by crypto whales. Other coins that have proved particularly popular among crypto whales include Ethereum, Cardano and even the meme coin Dogecoin.
Can Crypto Whales Affect the Market?
Crypto whales buy up huge volumes of cryptocurrencies and stockpile them for extended periods. While it can be easy to assume that these whales are passive and that their actions have no wider implications for the crypto industry, that isn’t strictly true.
How exactly do crypto whales affect market conditions? It’s all to do with supply and demand. For example, as a whale buys up large quantities of a particular currency, they are taking coins out of circulation. This reduces supply, which can see prices skyrocket if demand remains high.
Whales can also have the opposite effect on the market. If a whale starts to sell off their holdings, this floods the market and increases supply. This will, in turn, drive down prices, as the rate of supply eventually outweighs the level of demand.
Crypto whales are incredibly influential. Traders and investors will monitor whale behavior very closely, as their actions can cause wild market swings. Shrewd investors will time their moves to take full advantage of the effects whales can have on market conditions.
There are even dedicated websites that are used to track crypto whale behavior. These can be key for investors looking for an edge while trading on the market. Some whales remain dormant for years, while others are more active. It’s important to monitor as many as you can if you want to take advantage of them.
Crypto Whales and Bull Runs
A<a href="https://www.investopedia.com/terms/b/bullmarket.asp" target="_blank" rel="noopener noreferrer nofollow"> bull run</a> is an event all crypto traders hope for. It’s a period of extended growth during which prices can skyrocket across the industry. The exact triggers that set bull runs in motion can be difficult to pinpoint, but crypto whales are certainly among them.
When a crypto whale starts buying up a particular cryptocurrency, this can create a domino effect. Other investors will start buying the currency too, in an attempt to get in before prices start to rise. As this continues, it can eventually trigger a wider bull run.
This is one of the most important roles whales play in the crypto ecosystem. Bull runs can be incredibly lucrative times for investors, which is why whale activity is monitored so closely.
Can Anyone Become a Crypto Whale?
As we’ve mentioned, crypto whales hold huge volumes of cryptocurrency. When it comes to valuable coins like Bitcoin and Ethereum, this means whales need to be extremely wealthy. Often, whales that hold high-value coins are businesses and organizations, rather than individuals.
However, that doesn’t mean you can never become a crypto whale. There are thousands of cryptocurrencies available today, the vast majority of which are nowhere near the value of the top assets like Bitcoin and Ethereum.
If you want to become a crypto whale, look into some of the more affordable options. While there are plenty out there, that doesn’t mean you should dive straight in and pick one at random. It’s essential that you do your research ahead of time. Look into the technology behind a potential investment, analyze its price history and assess its future potential.
Once you have decided what asset you want to invest in, you’re going to need a quality crypto wallet. Whales are often targeted by hackers attempting to steal their holdings, so you will need a wallet with advanced security features to keep your assets safe.
Conclusion
Not many people know what crypto whales are, let alone how important they are for the crypto ecosystem. They often exist in the background, separated from the daily activity of the market. However, when a crypto whale makes a move, either through buying currencies or selling holdings, the effects can be significant and ripple throughout the entire industry. If you’re thinking of investing in a cryptocurrency, pay close attention to whale activity, as this can affect the price and future value of your assets.
Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/why-are-crypto-whales-good-for-the-crypto-ecosystem-tbt80274.html">https://thebittimes.com/why-are-crypto-whales-good-for-the-crypto-ecosystem-tbt80274.html</a>

Why are Crypto Whales Good for the Crypto Ecosystem?

TheBitTimes

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