The crypto market is one of the most volatile markets in the world, and is one of the reasons why the crypto sector has become so popular in recent years. Usually, the prices change due to positive or negative news, major developments, and controversies. There are also cases when crypto prices change due to price manipulation. In order to manipulate the price of global assets such as cryptos, you need a significant amount of capital. However, there are some people who have this kind of capital and can impact the market quite severely.
These people are wealthy individuals, commonly known as crypto whales. This guide will explain what a crypto whale is, how it can affect the market and how to spot them. By knowing that, traders and investors in the crypto market will be better equipped to handle sudden price movements.
What are crypto whales?
A cryptocurrency whale, also known as crypto whale, is a popular term for wealthy investors. This includes people who commonly buy or sell billions of dollars worth of cryptocurrencies. They are called whales due to their size compared to the “smaller fish” in the crypto ocean.
Crypto whales are individuals who hold a significant amount of a certain coin or token, for example, most Bitcoin whales own at least 1,000 BTC.
The estimated distribution of Bitcoin across all network entities over time is expected to look like this:
A crypto whale is usually imagined to be an individual, but it may very well be an entity. This can include a company, a digital currency group and various organizations.
Due to their impact on the crypto market, most whales tend not to trade on traditional crypto markets. They are well aware how much of an impact they have on price movements. They can severely affect the liquidity of any [crypto exchange](/) that they trade on. Instead, they engage in over-the-counter (OTC) crypto trading. That way, they can buy or sell to each other, without affecting the price of the crypto asset significantly.
However, there’s a small minority who intend to manipulate the market by performing large transactions. Whether that would have a positive or a negative impact depends on their agenda.
How does a crypto whale affect the market?
Crypto whales can help prevent crypto prices from crashing, or cause crashes with one move. They do this by simply manipulating the market sentiment. Let’s say that the price of some crypto asset is stable. If a whale decides to start selling a substantial amount of coins, the price is likely to go down. Alternatively, if they start buying a huge amount of crypto, the price of the asset is likely to rise. Their single major buy or sell order could cause other investors to follow their lead. For exchanges, this can be a big problem, as major whales can impact the liquidity of a certain coin.
Are crypto whales dangerous?
Crypto whales can be dangerous for other investors in certain situations. Whales tend to put other investors on high alert simply by moving their assets. Even if they are only moving them from one of their wallets to the other. Investors tend to start monitoring their every move whenever something like this happens. Their biggest fear during such times is that the whales will start dumping their coins.
If this was to happen, the price of the coin would likely fall. This can significantly destabilize the market. One way to stabilize it again is for the whale to revoke their sell order. Another is for the combined buying power of the market to catch up to the whale.
Simply put, whales can be dangerous for the market if they want to affect it. It’s not always clear what their motivation might be or what they seek to accomplish. However, when whales intentionally affect the price of an asset, they attempt to profit from the transaction. Since no one knows when the whale might make a move, many engage in what's called whale watching.
What is crypto whale watching?
As the name suggests, whale watching is the process of monitoring a crypto whale’s activity. By identifying a whale and noticing their moves in time, traders can react in a timely manner, thus avoiding potential losses.
Whale watching can, in some cases, can even help other traders profit. Of course, they need to accurately read the whales' intentions and make their own trading decisions. Whales won’t wait for traders to analyze their plans and will proceed with their trades regardless. This is why speed is crucial. There are even people dedicated to whale watching.
These individuals typically report any major whale activity on social media. If the whale is making a particularly major move, they sound a whale alert to notify others. You can even find entire websites dedicated to whale movements.
How to spot a crypto whale?
Thanks to the transparency of blockchain technology, there are many ways to spot and [track whales](/learn/crypto-whale-transaction-analysis-ways-to-monitor) and their every move. It’s not always easy to do so, as whales try to find new methods to move large amounts of crypto. They try to hide their identities with innovative tactics but are still unable to completely mask their activities.
A good starting point is to analyze trading patterns. Whales tend to make an impact in the market with large trades. Noticing these trades and tracing them back to their origin can help identify a whale.
Another method would be to find large transactions using blockchain explorers, such as Blockchain.com or Etherscan. You can also keep an eye on Twitter and other social media platforms and wait for a whale alert. Many people track whale movements and [announce them](https://twitter.com/whale_alert?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor) as soon as they spot them.
Should traders follow crypto whales?
Following a crypto whale can be advantageous if you know what you are doing. A lot of traders tend to react as soon as they notice a whale moving their asset. Although it’s not always a good thing, following a whale can have its benefits, such as gaining insight into market sentiment. Since they hold large amounts of crypto, any move can impact investors’ opinions, especially in [day trading](/learn/beginners-guide-how-to-day-trade-bitcoin-and-crypto). It can sway confidence in the asset and cause mass buying and selling.
At the very least, being informed of the whale’s activities is a good thing. However, following them blindly and mirroring their moves is not a good idea. Investors should never assume that the whale’s moves will benefit them.
You could maybe avoid losses by selling when the whale sells. However, if you are in it for a long-term investment, you can just ride out the storm. Each investor has to consider their own situation and position and make their own trading decisions.
Who are some of the best-known crypto whales?
The crypto industry has hundreds of whales. Some are known to us by name, others by their address. Whales can be organizations or individuals, but for the purpose of this guide, we selected top individual whales.
For example, one of the largest crypto whales out there is Brian Armstrong, the CEO of Coinbase. Coinbase is one of the world’s largest exchanges, and the largest crypto exchange in the US. Meanwhile, its CEO is among the largest whales in the industry. His net worth is estimated at $2.5 billion as of 2023.
Another major whale is Changpeng Zhao, also known as CZ. Zhao is the CEO of Binance, the world’s largest exchange by market cap. He invested large amounts of BTC in 2014, becoming one of the many Bitcoin whales. In 2017, he launched Binance, and then its numerous subsidiaries around the world. His net worth as of 2023 is $10.5 billion.
Then, there are the so-called Bitcoin billionaires, the Winklevoss twins — Tyler and Cameron. The twins first caught the eye of the public when they claimed that a fellow Harvard student had stolen their idea. The idea was for a social platform, and the student was none other than Mark Zuckerberg, the founder of Facebook. Zuckerberg and the twins reached a settlement in 2012, in which he paid them $65 million. The twins then invested significantly into Bitcoin, taking hold of more than 70,000 BTC. They also founded Gemini — their own crypto exchange — two years after the settlement. Today, both brothers have an estimated net worth of $1.5 billion.
The final word
Traders have been known to make their trading decisions based on whale movement quite often. While this is best left to the experts, it is worth knowing what is happening. Keeping track of whale movement can help your [fundamental analysis](/learn/cryptocurrency-technical-analysis-101). That way, you can predict price movements and react accordingly. The whales have enough influence in the crypto industry to be considered a force of nature. With that being said, skilled investors can use their actions to their own advantage.
FAQs
Who is the biggest crypto whale in the world?
It is not easy to estimate who is the biggest whale since their holdings are not always known. However, Binance’s Changpeng Zhao might be one of the biggest out there. Apart from him, Satoshi Nakamoto, Bitcoin’s creator, is likely the biggest inactive whale.
How much is a crypto whale worth?
Each whale’s wealth is different, but most consider entities with 1,000 BTC or more as whales. Since whales can have multiple wallets, it is hard to identify them. A person can hold coins in multiple wallets and not be identified as a whale, even if they are one.
How do you identify crypto whales?
The most efficient way of identifying whales is to trace large transactions back to their source. You can do this with blockchain explorers and identify which wallet the transaction came from.
How many crypto whales exist?
The number of whales in the crypto industry is unknown. Some whales are careful enough not to be identified as a whale at all. They manage their cryptos with extreme care and trade without raising the whale alert.
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