Crypto Whales — who are they and how do they maintain anonymity?
Who are Crypto Whales, what is their role in the market and how do they manage to remain anonymous? Read our article to learn more.
Satoshi Nakamoto — surely you have come across this name at least once, even if you are new to the world of cryptocurrencies. But who is he and why are people like him called Crypto Whales? Let's find out!
Crypto Whales — who are they?
Crypto Whales are individuals that own large amounts of cryptocurrencies that they have accumulated through early investments, mining or other methods. In other words, they are very, very rich people. But why are they called whales and what is special about them? Crypto Whales can influence the market by buying or selling large amounts of assets and thereby cause price fluctuations, having significant cryptocurrency capital at their disposal.
They appeared back in the 2010s, when cryptocurrency was worth a penny. Many have accumulated impressive amounts of digital assets and over time, due to rising prices, they have turned into large whale holders. But how much crypto do you need to own to be considered a whale? There is no specific number of crypto assets. If a person owns a significant percentage of the total supply of a particular cryptocurrency and influences the price movement by making transactions, then this is a cryptocurrency whale.
But who is Satoshi Nakamoto and what is his role in the market? According to crypto expert Kashif Raza and the Arkham analytical platform, it is assumed that Nakamoto owns approximately 1.1 million BTC — this definitely makes him (or them?) the largest cryptocurrency whale in the world. Satoshi's identity is carefully hidden and no one knows who is behind this pseudonym. It is believed that if his identity becomes known, the market will quickly destabilize. This is due to the fact that the actions of the creator of bitcoin will be closely monitored.
Tesla and MicroStrategy are also cryptocurrency giants. When Tesla announced the purchase of $1.5 billion worth of bitcoins in February last year, the price of bitcoin reached a new historical high on this news, soaring by 15% to $44,000.
Although some representatives of the cryptocurrency community like to blame whales for major price drops and market manipulation, the reality is that there have been, are and will be whales in all financial markets that can influence the price. Whether we want it or not.
How can they be useful?
Whale tracking can be a very useful activity and provides several advantages to investors and market participants:
- Understanding the behavior of a whale provides insight into market trends, potential price movements, and investor sentiment.
- The identification of large transactions or the movement of funds by whales shows possible changes in the market.
- Whale activity often indicates momentum. This can be useful when planning to "enter" or "exit" a particular cryptocurrency.
If you want to better understand where to invest or what to sell/buy, track the actions of the Crypto Whales. But don't blindly follow them. Always do your own research and don't invest blindly in cryptocurrencies.
But if you still want to track Crypto Whales, then you can do it using tools such as Etherscan and Blockchain.com. They allow you to study and analyze transactions on the blockchain, including transactions with large amounts of cryptocurrency.
Services like Whale Alert track and report significant transactions in real time, identifying Crypto Whales.
How do they maintain anonymity?
Staying anonymous with a huge amount of money is like going unnoticed with a height of 2 meters, 10 centimeters. And yet the Crypto Whales manage to do it. But how? They use a variety of ways to protect their anonymity and privacy, for example:
- Dispersed storage: In order to hide the total amount of cryptocurrency owned by a Crypto Whale, he often uses different wallets for storage. This makes tracking the final volume of digital assets more difficult.
- Anonymous cryptocurrencies: Sometimes cryptocurrencies use more privacy-oriented cryptocurrencies (such as Monero, Dash) than Bitcoin or Ethereum in transactions. Such coins are based on sophisticated technologies, thanks to which you can hide the source, destination and amount of funds.
- Cold wallets: Large holders usually keep most of their assets in cold wallets. This helps to additionally protect against hacking and other threats, and also allows you to maintain control over the keys for accessing assets.
- Offshore zones: Some Crypto Whales keep their assets through trusts or offshore companies. This means that holders can easily hide their personal data from outsiders. However, it is very easy to get into trouble with the tax service and get into large fines, asset seizure or even get prosecuted.
Is it worth keeping an eye on Crypto Whales?
Whale watching can help you gain more information about the market and develop an investment strategy. However, it must be remembered that it should not be the main factor in decision-making and you should not completely rely on the actions of other people. It is necessary to take into account not only the activity of whales, but also the indicators of tokens and the prospects of projects. Track not only whales, but also the economy and the level of market volatility. This is the only way, by thinking with your own mind, you will be able to make the right investment decisions.
