Would the extinction of whales be “good” for bitcoin?
Bitcoin whales and their large trades have a potential impact on the market. If not directly, then in the psyche of investors and market observers there is often a reflex to “join” the movement. At the moment there is a discussion whether one whale contributed to the increase of bitcoin price to ATH in 2017. Anyway, it is appropriate to accept the fact that bitcoin whales have a huge impact on the market. Co-founder of the Whale Alert, Frank Weert claims that the potential extinction of BTC whales would bring invaluable benefits to the industry.
Weert is of the opinion that these whales still have sufficient power to influence the market. It also hopes that in the coming years the distribution of BTC will be better, which could lead to the disappearance of some of the big players or at least reduce their impact on the market.
The future of bitcoin, as an accepted and normalized asset to invest, now depends on its chance to become an ETF in the US. However, the SEC is steadily turning its back on its proposals. One of the main reasons why Bitcoin ETF has not been approved so far is the fear of manipulation.
Whale movements are a great way to predict future price movements.
With the Whale Alert on Twitter, we have access to instant information about the large whale movements of the BTC. Frank Weert, in an interview with SFOX, explained several cases where whale movements had actually shifted the markets. Here is one example:
Between 29 August and 6 September 2018, a bitcoin whale landed a BTC worth approximately $1 billion, transferring it from one portfolio to the stock exchanges for sale. On September 6, when most of the BTC in the portfolio was sold, the price of bitcoin fell by almost 15% and 30-day volatility increased by almost 25%.
Weert added that this correlation did not imply a cause and effect relationship. However, he is “deeply convinced that whale trading can have a profound impact on the price of the market. Knowing about currency flows is a great way to anticipate potential fluctuations.
The extinction of BTC whales
Weert hopes that whales will die out one day, and thus their influence and ability to manipulate the market will be reduced:
Ultimately, the distribution of BTC […] will be a bit more even and, I hope, there will be fewer whales.
Of course, it’s not that simple. The whales have arrived where they are by entering the game early enough, when the coins were easy to get.
Proportionally, the variable value of their share will remain related to the impact they may have on the market. Of course, this will only happen if they actually decide to continue with the HODL or even to increase their balances. Weert believes that the real rival of bitcoin whales could be the institutional investment companies collecting BTCs.
What is your opinion on this subject? What would change the extinction of BTC whales on the market? We would like to invite you to a discussion.
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