As cryptocurrencies become more and more popular, we’re seeing an increasing number of people get involved with these exciting digital assets. Some choose to buy some crypto as an investment option, while others trade to take advantage of fluctuating prices.
The crypto world is full of new terms and concepts to learn. Before you look into the best cryptocurrency to buy today, it’s important that you research and understand the technical side of the industry. In this article, we examine crypto whales, discuss what they are and go over how you can become one. Read on to learn more.
What is a Crypto Whale?
For newcomers and casual crypto fans, the idea of a crypto whale isn’t one you’re likely to come across. However, as you explore the industry further, it becomes a key concept that is important to learn about if you want to gain a deeper understanding of the industry.
A crypto whale is a term used to describe someone who has bought a large volume of one type of cryptocurrency. To truly qualify as a whale, this volume must be large enough to influence the market value of that currency.
How Common Are Crypto Whales?
Given that crypto whales need to hold huge volumes of cryptocurrency, you may assume that they are a relatively rare occurrence. After all, holding that much crypto can require a large financial investment, enough to be out of the reach of most ordinary people.
However, crypto whales are more common than you might expect. Let’s look at Bitcoin as an example. Of the coins currently in circulation, a significant portion is owned by crypto whales. Over 15% of available Bitcoin is currently held by whales.
This is also the case for other cryptocurrencies, including the popular memecoin Dogecoin. Approximately 75% of all available Dogecoin is held across 14 crypto addresses. This accounts for an astonishing 70 billion coins.
How Do Crypto Whales Affect the Market?
Whales are an integral part of the crypto market, and their actions can have widespread implications that affect the entire sector. They are so influential that there are websites and platforms dedicated to tracking whale behaviour.
Whales can influence the market in a number of ways. First and foremost, they can affect a currency’s short-term value. This is due to the principle of supply and demand, which is a key factor in fluctuating market prices.
If a whale begins to sell off their assets, the market will be flooded. This increases supply and, if this outweighs demand, will drive down the price of the asset. Conversely, by buying more currency and holding on to it, whales can create scarcity. As demand outweighs supply, the value of the asset will go up.
Furthermore, whale behaviour can also be used to assess imminent market trends. When whales buy crypto, this is an indication that prices could soon rise. Whales that are selling off assets could be a sign of an impending market crash.
Finally, whales can also influence the design, development and evolution of a cryptocurrency. Decentralisation is at the core of crypto, with users allowed to vote on changes to particular assets. Whales, given their large portfolios, can be highly influential, particularly if they hold large quantities of governance tokens, which are used by cryptocurrencies as a vehicle for voting.
How to Become a Crypto Whale
Whales are respected members of the crypto community and are regarded as both influential and knowledgeable. If you want to become a crypto whale and enjoy the benefits that the status can offer, what is the best way to go about doing so?
The first thing you need to do is buy a significant amount of a particular asset. Generally speaking, you will need to hold at least 10% of an asset to be considered a whale. This means that the amount you need will depend on how much of a particular cryptocurrency is in circulation. For example, you would need to hold around 12 million Ethereum to be considered an Ethereum whale, while you would need to hold 3.5 billion Cardano to be considered a Cardano whale.
You will also need money if you want to become a crypto whale. How much will depend on the value of the asset you are buying. Becoming a Bitcoin whale will be much more costly than becoming a Litecoin whale, for example, but the potential returns could be considerably higher.
Research and planning thoroughly ahead of time are absolutely essential. You should study the available coins on the market, evaluating their price, performance and future potential. Draw up a shortlist of potential assets and then compare and contrast them to find the perfect asset to buy in bulk.
You will also need a top-of-the-line crypto wallet if you want to become a whale. Holding such a large quantity of crypto makes whales an attractive target for scammers and hackers. A good wallet will keep your assets safe and protect them from potential threats and cyberattacks.
Whales are often overlooked or misunderstood, but they play a vital role in the crypto industry. Use this guide to learn what whales are, how they affect the market, and how you can take steps to become one.