In the year 2021, cryptocurrencies have experienced significant highs and lows. As a result, the market is volatile like never before. As per experts, the only reason behind this fact is that bitcoin whales are highly active in the marketplace since bitcoin has touched an all-time high of $65000.
The digital asset resembles a gold mine for the investors who bought bitcoin for just a few dollars. After seeing bitcoin skyrocketing for continuously four years, bitcoin whales came into play in 2021. Check all in one bitcoins review site for getting a detailed guide on cryptocurrency trading. Bitcoin whales have powered the crashing of the cryptocurrency marketplace to the floor but was this market crash caused by bitcoin whales? Let’s find out.
Do bitcoin whales have the potential of crashing the cryptocurrency marketplace?
Over the past few years, bitcoin whales were alleged to crash the cryptocurrency marketplace, but are they that potential? Yes, cryptocurrency whales have played an essential role in the marketplace for a very long time. You might wonder what bitcoin whales are; think of the bitcoin whale as the wealthiest person in a room sitting idle for a very long time. If bitcoin whales perform any single movement in the marketplace, it affects the movement of small retail investors. Fellow bitcoin whales don’t feel any impact by any other bitcoin whale movement as they already have made their profits from BTC.
Bitcoin whales tend to hold the maximum amount of bitcoin an individual can hold. So if such individual sells off 10% of their holding, the market value of BTC gets down. Suppose whales don’t sell their cryptocurrency holding for five or six years. In that case, it affects the volatility of that coin, with bitcoin whales lowering the liquidity by not selling their digital assets, skyrocketing volatility.
Satoshi Nakamoto and Tim Draper are some of the most famous bitcoin whales we know. As per reports, Satoshi Nakamoto seems to be the developer of the largest cryptocurrency in this world, bitcoin. The developer itself has a bag of $1 million BTC. If Satoshi sells 10% of his BTC, he will appear on the wealthiest person list in the world. Many other whales are present there, but no one knows about their identity as the transaction on the bitcoin network is pseudonymous.
Did bitcoin whales crash the market?
Bitcoin whales seem to be quite optimistic about the future of BTC as no BTC whale has sold a considerable amount of its holdings so far. However, recently one of the leading bitcoin whales came into action as it was seen first buying a massive number of BTC and then constantly selling some BTCs. These actions lowered the market value of BTCs as well as other cryptocurrencies. But it was way after the cryptocurrency crash. The market crash of 2021 occurred on 19th May, and there were some big reasons behind this crash.
The cryptocurrency experts alleged both China and Elon Musk for doing so. Elon Musk, the owner of Tesla Motors and a few other famous companies, has been active in this space since the start of 2021. First, Elon musk allowed bitcoin payments to facilitate cryptocurrency exchange for buying Tesla cars. But later, after addressing the energy usage for each cryptocurrency transaction, Elon musk decided against suspending such payments.
The tweet led to a bloodbath in the market; people criticized Elon Musk for manipulating the market value of cryptocurrencies with his Twitter handle. China’s latest cryptocurrency regulations fueled the bloodbath. Ban on cryptocurrencies is not new for China, but the cryptocurrency ban in China is robust and has also banned bitcoin mining.
China was home to cryptocurrency mining, and now only a few miners are mining these digital coins. For mining purposes, miners have to buy mining machines, and China is the leading manufacturer of these machines. Bitmain, the leading ASIC Company, resides in China and has spread its roots all over the globe. After China and Elon Musk’s, the market fell like a free fall. But the following tweets of Elon musk helped the market stabilize as he advised people not to sell their holdings.
These are some decisive facts regarding bitcoin whales influencing the market.
