You've probably heard the term "crypto whales" thrown around. So, what are they and what's their role in the market?
Cryptocurrency whales are investors who hold a significant amount of a currency. The name comes from the largest creature in the ocean that can overpower the smaller ones, ie, it can go on it's intended path without resistance from others. These whales can be an individual person or a group of people that has a single crypto address. Typically, a Bitcoin whale is someone who holds 1000+ BTCs.
These whales originated with the growth of cryptocurrency in general. Investors bought (or mined) in high volumes to then impact the market. An example of how this works is when a Bitcoin whale sells a large portion of their shares, the market will respond with a price drop. Now, they can buy it back at a lower price, which will cause the market to push prices up. They can repeat this process to make a profit. Because whales own such a large amount of the currency, even small drops and rises can result in large profits. Similarly, they can manipulate the market to drive prices up by using their vast amount of funds to purchase more coins.
Some of the most notable of Bitcoin whales are Satoshi Nakamoto (Bitcoin developer), Blockchain Capital (venture capital company), Tyler and Cameron Winklevoss (founders of the crypto exchange Gemini), and Brian Armstrong (Coinbase founder/CEO). It is estimated that 42% of Bitcoin is owned by whales, but since only the Bitcoin address is public, most of these whales are anonymous.
Although they have a lot of power, the whales are important in the crypto market since they drive the trading within it. When prices drop, newer investors join and when prices jump, smaller investors can profit. So as a small fish in the sea among these whales, what can an investor do? When the whales take action, the best plan is to notice the trend and ride the wave with them. That way, we can also make profits off the market fluctuations.