Crypto market has witnessed tremendous growth with many crypto assets reaching sky high levels. With the growing popularity, cryptocurrencies also gained investors and buyers resulting in its wide adoption. The holders defined on the basis of keeping the amount of cryptocurrency being held in their wallet addresses. And crypto whales are the one such category of crypto holders.
Crypto whales are those accounts known to hold a relatively large amount of any crypto asset or multiple crypto assets in bulk for that matter. These accounts could be held by individuals or entities. Crypto whales are also referred to as whale accounts, sharks, fat men or just whales.
In the crypto market, crypt whale accounts have their own dominance given the quantity of crypto they hold. Although there is no specific amount for which defines a wallet address as a whale address, a common notion is the account holds around 10% of overall circulation of a particular crypto asset.
The amount also differs along with different cryptocurrencies. The dominance of whale accounts within a crypto ecosystem could also define its centralization. Given the fact, the more a whale account would hold the crypto assets, the more the whale would have influence on the cryptocurrency.
Given the majority holdings of a crypto asset, any activity in these crypto whale accounts could directly make an impact on cryptocurrency itself. The specific case may vary depending upon cryptocurrency’s type and significance in the market.
According to BitInfocharts, by May 2022, the top four crypto wallets were holding about 3.49% of overall bitcoin (BTC) in circulation. While the top 100 whale accounts were responsible for having 15.36% of overall bitcoin (BTC) supply.
The case with popular memecoin Dogecoin is significantly different where it seems to be more centralized. The top 15 crypto wallets holding Dogecoin (DOGE) were said to hold about 29.5 billion DOGE—which was more than 52% of the overall supply. Clearly the top holders can easily dominate and manipulate Dogecoin—from trading volume to trading price.
Given the significance, whale accounts are largely followed and several aggregators also keep watch on them as well as keep posting about any significant move. Activities in whale accounts could also lead to deciding the fate of specific cryptocurrency and could be inferred as many messages at once.
Dumping of crypto or accumulating crypto in bulk by whale accounts, both the instances create turbulence within the market.
Source: https://www.thecoinrepublic.com/2022/11/11/why-crypto-whales-hold-so-much-dominance-in-the-crypto-market/