Chainalysis Research: Bitcoin Whales are not Destabilizing Factor in the Market

Cryptocurrency market follows the same path the capital markets do!! In a recent news story, based on the study of 32 leading BTC wallets representing almost 1 million BTC ($6.3 billion), one of the research firm (on blockchain domain), Chainalysis presents its analysis saying that Bitcoin whales are not held responsible for any price volatility in the crypto market.

Theoretically, the BTC whales contain usually individuals or any companies having a big amount of cryptocurrency that influences over market volatility. However, Chainalysis’ research elaborates more on the subject matter saying that “a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on the net, traded against the herd, buying on price declines.”

In order to incorporate more in-depth analysis, the company bifurcated almost 32 wallets into four groups. The first group activities focusing on nine wallets of traders that execute transactions on a daily basis through BTC on various exchanges. So collectively this group drives more than 332,000 coins amounting to more than $2 billion however only 33.33% actively execute their trades and majority of these users have started trading in 2017.

Another group focuses mainly by early adopters and miners consists of 15 investors holding almost 332,000 coins. There are numerous investors of this group expected to have divested from 2016-17 especially when BTC prices were high even though the trading activity of this group sought “very low”.

The other two groups are comprised three wallets of criminals holding more than 125,000 coins with assets value amounting to $790 million. The lost wallets having more than 212,000 ($1.3 billion). However, based on the study, there was no transaction sought since 2011 from Lost wallets.

The overall finding suggests that trading whales are not held responsible for the prevalent volatility in the entire crypto market. The study further elaborates that “That net activity demonstrates that trading whales were not selling off Bitcoin in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market…”


Shalin Soni

Shalin joined CryptoNewsZ as Associate Finance (Cryptocurrency Research & Analysis) in 2018 and has 10 years of collective experience to work on financial modeling and financial planning & analysis activities (fp&a) domains. He has worked with various organizations in India and added values by leveraging his skills and expertise. He has strong domain expertise in research & analysis, valuation, and fp&a!! You can also mail him at [email protected] to discuss anything related to his reports.
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