What Is Crypto Whale?

Last updated Jan 18, 2024 | 12:49 PM UTC

Crypto whales have become one of the more frequent appearances in the market. The name refers to entities or people who possess a notable amount of cryptocurrency.  Among other things, this allows them to control the price of the currency. 

If you want to get an idea of what is considered a whale in crypto, you should keep reading our review.

Crypto Whale Definition

Achieving the status of crypto whale depends on subjective criteria.  According to common opinion, an account with a large crypto percentage (compared to the market available) is a crypto whale.

The term also indicates that such individuals have more crypto than other participants in the market. That's why they are whales compared to other fish out there. 

A perfect example of a whale in crypto is Dogecoin, a centralized coin that registered 15 addresses holding about 52% of the coin in May 2022.

What Is Crypto Whale: Dogecoin Whale Tracker
Dogecoin's Whale. Source: dogecoinwhalealert.com

Such large accounts are under the surveillance of the community and potential investors. Once any of the largest 1000 wallets complete any transfer, this will be publicly available via the Whale Alert site and Twitter account.

Origins of the Term ‘Crypto Whale’

In case you haven't heard about whales in crypto, it's high time to learn more about them.

The phrase has emerged within the crypto community, where the ocean is a metaphor for the crypto market. This ocean has certain rules for traders and investors who explore it for favorable opportunities. 

However, the ocean usually cares more about big fish which invest more and give larger contributions to it than smaller ones. Every decision of the crypto whale in the metaphorically created marketplace affects all the other participants.  As a result, other investors choose to follow the behavior of the main actor.

Effects of Crypto Whales on Crypto

Once you become aware of the crypto whale meaning, you can continue by exploring its effect on crypto. 

Crypto whales have an immense proportion of market-available cryptocurrency. This allows them to control not only the price of coins, but also governance protocols. You might have heard that small fish in the ocean always follow the moves of big fish to make the best possible decisions.

The crypto market works in the same way as the global economy. A few dominant stakeholders control the activity of others, shaping their future and available options. If one of the crypto whales makes transactions, this suddenly becomes big news in the market.  Other investors then follow their behavior and prepare themselves for possible price fluctuations. 

Next, you will probably want to know “what is a whale alert in crypto?”

Following the moves of big fish is possible thanks to the websites with the tracking purpose. For example, you'll find Whale Alert for watching their transactions. While whales impact the entire crypto market, their influence on liquidity and price is much more important. Each time a whale undertakes a huge action, one of these metrics is affected.

Effect on Liquidity

Liquidity is one of the widely used terms in the economy and cryptocurrency world and refers to the number of available coins for use. Crypto whales usually pump the value of protocol, but they also lower the liquidity. This happens because coins stay stuck instead of moving from one trader to another. When the value remains in the wallet, this means that other investors don't have many trading options out there.

What Is Crypto Whale: Effects

Effect on Price

Apart from affecting the liquidity level, crypto whales also influence the price of currencies. This is because their transfers make up a huge proportion of the total amount of circulating currency. When a whale sells his coins for fiat, the prices will certainly fall. When several whales sell their holdings, this acts as an alert for investors. As the number of whales selling their holdings increases, the coin's price is likely to sink even more.

Whale Size

When you get the answer to the question “what are whales in cryptocurrency?”, you should also investigate their size. It's common to see a disagreement regarding the threshold for a crypto whale. 

For Bitcoin, experts say that having at least 1000 BTC suffices to be a crypto whale. Since Bitcoin is a valuable token with a significant presence, setting such a high threshold makes sense.

Taking a look at other cryptos, possessing at least 10% is enough to be called a whale. People who hold such a percentage have a large impact on the currency’s price. At the same time, everything that a whale does is a perfect indicator of how to estimate the future price of the cryptocurrency. 

Still, you'll find different opinions about “who are the whales in cryptocurrency” and what percentage is necessary to acquire such a status. While some people connect whales with individuals who have enormous holdings, others use the terms for crypto institutions. On top of that, famous investment firms such as Pantera Capital and Fortress Investment Group have a significant effect on crypto, and therefore  are also famous for being whales.

Importance of Crypto Whales for Investors

If someone holds a significant amount of crypto, there are multiple ways of managing their possession. However, moving coins doesn't necessarily mean selling them. They can do this as part of a big purchase or wallet change.

You can also see whales trying to get rid of their assets in small sums over a certain period to avoid attention. With their moves, whales can trigger market distortions, and lower the price even further. Therefore, investors follow the whale addresses to find out both the number and value of transfers. 

Biggest Crypto Whales

Crypto whales are well-known individuals who make headlines because of their status and influence in the market. You can also find some organizations with a similar status. 

Let’s take a look at the famous crypto whales: 

  • Brian Armstrong: The owner of the famous crypto exchange, Coinbase, known for processing billion-worth transactions on a daily level. At the moment, Armstrong's net worth is about $3.6 billion.

What is Crypto Whale: Biggest Crypto Whales

  • Changpeng Zhao: The founder of Binance, one of the leading crypto exchanges. Zhao invested massive amounts of BTC in 2014 and introduced the platform in 2017. Now it allows customers to use different products and services such as debit and credit cards, mining, and venture capital.
  • Winklevoss twins: The brothers Winklevoss made the headlines for accusing fellow Harvard colleague Mark Zuckerberg of stealing their idea for the huge social media platform. They received a settlement of $65 and used the funds for investing in BTC. They now have 70,000 + BTC.  The famous twins are also founders of the Gemini crypto exchange

What Is Crypto Whale Tracking?

Learning about big fish and their activity wouldn't be possible without tracking.

The real question is how to follow crypto whales and how to see what crypto whales are buying.

Crypto whale tracking includes certain solutions that follow the actions of whales. Such solutions can generate analytics on whales’ behavior and also make investment decisions for users.

The next important step is how to track crypto whales.

This is only possible by using special tools designed for the same purpose. Thanks to crypto whale tracker, investors can detect wallets owned by whales and track them when buying and selling. Using tracking tools enables the automation of the process. 

What Is Crypto Whale: Whale Trackers

You'll usually see that investors hold different cryptos in their portfolios. To get information about market movements, they have to identify and follow several wallets with a massive crypto volume they are looking to buy. By using on-chain analytics tools, this has now become a real-life option. 

Tracking tools search through a blockchain, detect transactions by a whale wallet, and inform the user. Crypto whale tracker could also identify transactions over a particular size, thus allowing individuals to discover the whales in the crypto market.

What Does Whales Mean in Crypto?

Crypto whales could significantly affect the market by means of their activities. This usually happens with big purchases or cryptocurrency sales.

In fact, crypto traders can benefit from whales’ behavior and get hints about future prices. However, you should be aware that cryptocurrencies are highly volatile, and whales are only one element that influences them. 

Those who are looking for long-term investment strategies shouldn't pay attention to insignificant coins’ movements. The price of any crypto is determined by different factors, including its adoption in the market, its daily use, and possible tech improvements. 

To wrap up, you should always be aware of crypto whales’ existence and their activity. However, you should never overestimate their activity in the market when making any investment decisions.