In relation to cryptocurrency, a whale is an individual or an entity who owns an amount of certain cryptocurrency big enough to influence its price. Just like whales, whenever such people or companies make a move, it affects a lot of smaller ‘fish’ around them.
For example, a bitcoin whale is someone who has at least $10 million in bitcoin. At the moment, around 32% of all bitcoin in circulation is held in a little over a 100 whale wallets. The situation is similar with all major cryptocurrencies, most coins are usually held by a comparatively small number of wallets.
Whales are one of the reasons for high volatility in a cryptocurrency market. If a whale decides to sell a significant amount of coins for fiat, the transaction is viewed by other market players as a signal to sell their crypto too. This can bring the cryptocurrency’s price down and cause a fire sale.
Vice versa, when whales decide to purchase a large number of a certain cryptocurrency, they can boost a bull run. This happened in February 2021, when Tesla announced the purchase of $1.5 billion worth of bitcoin, it made bitcoin’s price surge 15% up almost instantaneously.
