Cryptocurrency Whales Are Unfazed About Losses As They Increase Hoard of Coins

Cryptocurrency whales

2018 has been bleak for the crypto industry. Many hodlers have been disenchanted with the poor performance of the market, especially so might be cryptocurrency whales.

They have every reason to be. These are individuals who became overnight millionaires in 2017 as they watched the price of Bitcoin soar unimaginably high.

The Super Rich Club

Considering that many bought the coin when it was worth nothing, they relished the fortunate happenstance of joining the club of the super rich. The excitement was palpable with apparent display of avariciousness to the extent that an exasperated Buterin felt like quitting.

In forums and other venues where Bitcoin enthusiasts meet, the discussion was mostly on the next big project. Nearly everyone was confident that the good times were here.

To the Moon and Lambo

Hodlers as cryptocurrency holders are called speculated on how high the digital currency will rise as well as on what they would do with their newly acquired wealth.

Top on the list of indulgences were fancy cars and vacations. Nearly everyone of them that could afford it had plans to buy a posh car. The favorite was a Lamborghini. A hodler must own one to be seen as accomplished. The fever was high pitch that a mini industry sprung around the desire for ‘Lambo’.

An Ominous Ban

Then September 2017 came an ominous China ban on Bitcoin. The country was just not comfortable with an intrusive currency it could not control. Hodlers held their breath at the consequence of the policy.

It passed…and Bitcoin won. The coin market continued to thrive and the Chinese forgotten despite the fact that the country continued to be home to dominant miners of Bitcoin. By December the coin was surging close to $20,000 in the wake of unprecedented pubicity.

A New-Found Path to Wealth

Everyone that knew little or nothing about monetary policies and finance were talking about the new digital gold and no one expected that the price of Bitcoin would not hit $30,000 in 2018. Some speculated that the coin will surge past the $100,000 mark but all was wishful expectations as no one reckoned with a bleeding coin market in 2018.

Bitcoin has since January lost more than 80 percent of its value plunging below $3000 from its all-time-high of $20,000 in December 2017. Altcoins such as Ethereum suffered an even more gloomy fate as most shed more than 90 percent of their January value.

Dipping Hodlers Confidence

The sustained bear market affected the confidence of many hodlers including whales. That prices have fallen for so long and so much made quite a number of whales cut their losses. Some whales hodling thousands of ether in crypto assets quietly sold them off as it became obvious that continuous hodling of digital assets was no longer the key to quick wealth.

Or is it?

Whales Took Advantage of Falling Prices

Blockchain data emanating from the Ethereum network shows that most whales hodling Ether actually bought into the dip. These have been increasing their ether stash despite the market down turn.

The result is that there is substantial increase in the volume of the cryptocurrency in possession of whales from what it was at the beginning of the year.

The study by Diar shows that 500 of the 1000 wallets owned by whales have been actively traded throughout 2018 resulting in 80 percent average increase in ETH stash in the wallets.   

Whale ETH Cache Increasing

The study showed that the period covering January through November represents a time of massive increase in the proportion of Ethereum held by whales.

The research stated that the volume in possession of these whales as at November is 20 million eth valued at $2.2 billion. This constitutes 20 percent of all Ethereum in circulation. Although this is down from the previous 33 percent before 2018, smaller number of whales have actually balooned their holdings.

cryptocurrency whales

The Diar report stated that the new trend in which whales are amassing ether has its roots in the dismal performance of initial coin offering, the cryptocurrency fund-raising method that fin-tech startups massively adopted in 2017.

As 2018 progressed, it became obvious that most of the ICO funded projects were just avenues to raise donations for entitiesas that could not deliver on their road maps.

This coupled with the speculations that the Security and Exchange Commission is poised to roll-out sets of regulatory rules for the coin market has made many whales seek sanctuary in ether.

ICO Became Near Synonymous With Scam

Compounding issues is the influx of hundreds of scam entities launching spurious ICOs to scam investors. One of the few successes of the 2018 ICO space is Sirin Labs which successfully launches a blockchain powered smart phone FINNEY.

Had ICOs proven to be worthy investment instruments, whales may have continued using them as tools of diversification of portfolio but their poor performance no doubt led to loss of interest.

The Diar report said:

 “The massive growth in Ether holdings by active whales could, and most likely is, the result of traders exiting the trading of tokens, most of which have been paired with ETH, which has plummeted by all accounts versus the start of the year.”

Even though the number of ETH wallets that qualify as whales have dropped by 30 percent, the increase in the volume of ether held by whale wallets has not correlated with new whales hodling. This infers it the remaining whales just took advantage of the falling price of ethereum to increase their store of the cryptocurrency.

That ETH cryptocurrency whales number has reduced but their hoard of the crypto increased shows that a smaller number have bought up more ETH.

Whale Culture of Strong Crypto Belief

Whales once held one-third of all ether in circulation. The fraction of their holding has reduced according to the study but smaller number of whales have simply increased their holdings ostensibly showing that these are strong believers in market rebound.

It really is interesting how the decentralized economy is turning out. It will be recalled that the concept behind cryptocurrencies was libertarian. Many of the early adopters wanted to be free from governmental influences and to some extent felt that the establishment encouraged wealth in the hands of a few.

Apparently, with the wealth in the hands of whales the crypto community seems to have take things in stride. Not everyone is happy though. The early investors in digital currencies have lost nothing even with the bearish 2018, but the late investors such as those that entered the coin market late last year have been licking their wounds.

Btc-Room101, in a contribution on the Bitcointalk forum said,

“The people at the top of all pyramid scams, can never understand why the people at the bottom that came in last are unsatisfied the people at the top are eating steaks and sleeping with the most beautiful whores, they just assume that everyone is living as such. Clearly, we have  BITCOIN social inversion here where the early miners who got rich, just can’t figure out why the ‘losers’ who came in last are pissed. I have an idea of equality, how about all the rich happy guys, spread their wealth around, so the losers WIN?”

In any case, it is obvious that some whales are winners and have continued to position themselves to keep winning as a buffetted coin market eagerly awaits a resurgence of interest.

Do you think that the whales are giving us the right signal? Let’s read your views on this whale behavior in the comment box.

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Author: Jofor Humani

Peddling words has been a passion beneath the surface. I speak less than I write...naturally. Aside speaking and writing, I walk too...good for your heart they say. I sometimes do not feel like writing. Then I enjoy quiet times which I use to think and stay with family.

14 thoughts on “Cryptocurrency Whales Are Unfazed About Losses As They Increase Hoard of Coins

  1. That is actually a tremendous decline for many cryptocurrencies. I used to be quite critical from the very beginning and haven’t invested yet. What is the recommendation for 2019?

    1. Yes it is, Juan. Nevertheless the outlook for 2019 isn’t as bleak as we have seen this year. In reality, what the coin m,arket has experienced this year is essentially a correction coupled with uncertainty. With time there’s going to be a stability built around the core hodlers and this bear market. There are so many waiting to be sure that the market has seen its bottom before moving in to take positions. The prospects are immense simply because everyone conversant with this market knows that the possibility of profiting from volatility is immense. What most speculators are waiting for is not to miss the next bull-run and also not to miss the next crash.

  2. Thanks for sharing your valuable views on Cryptocurrency and issue warning to the new entrants.
    I have not invested in Cryptocurrency. I treat it as a Scam. The ones who have joined early created hype around Bitcoins to make it popular enough. Once the common man starts joining, whales would either leave or reduce their stakes to buy again on fall. This process would continue if not controlled by Legal Authorities

    1. You are very correct Arun. It may not be collectively classified scam but most are close to scams. This is why everyinvestor should be careful before putting their funds in any coins or tokens. Having said that, the prospect of making money with cryptocurrencies is immense but expert advise is needed. Not every coin out there is worth putting your money in.

  3. Thank you for this article about cryptocurrency whales. I don’t know much about the market but somehow I tend to look at the value of different cryptos quite often. Maybe I should buy some ETH? Hmm.. They are cheap tight now. What do you think? Will the market bounce back?

    1. Eth is quite cheap now Fred but not as cheap as any investors aiming for long-term gain would want. Whales can afford it as $500. That’s why I advise folks just taking up position to wait until late January. We should have clear indications on where the market is headed then but even then ETH and Monero are good investment options although in reality everything depends on Bitcoin.

  4. I have not invested in cryptocurrency. Seeing as how it wasnt regulated, I did not want to risk it. I work with a couple people who had some bitcoin (although I currently dont know if they still have it) and when it was going through the roof for worth, they were ecstatic, always checking to see if it went up. Then when the decline started, they were cursing up a storm. I dont know if it will ever get to that point again, but if it does, i feel there would be an attempt to regulate it. What are your thoughts on that?

    1. Hello New Guy, a pity you missed out on crypto when the going was good or maybe I should say you’re lucky that you did. Many that joined during the spike of late last year are kicking themselves. Nevertheless, you cannot possibly lose if you join when the market bottoms as may happen anytime soon. On a personal level, I’d advise you wait a little bit to be sure that the downward trend has ended. I think we will know for sure by Q1 of 2019.

  5. Before starting my online business I wanted to invest in cryptocurrency simply because was afraid to take the risk and at that moment I had no idea what how it works, what is all about, as time goes on, now I have the knowledge decided to make part of this industry in 2019. Can you recommend some reliable websites_?

    1. Depends on what you want, there are modularized trainings that teach you how to make profit from the coin market. Although I have not used any of these sites, I suggests that you read up as much as you can find about the market on the internet. You can also check forums like Bitcointalk, they talk a lot about crypto.

  6. Very informative. Actually, I’m planning to get into cryptocurrency as well. But since I have zero knowledge about it, I’m just reading and digging information right now.
    But recently, I’ve been seeing posts like yours, saying that cryptocurrency is declining. So I’m starting to think that investing on it right now is not a smart move.
    Do you think, it will get better next year?

    1. Mina, the decline is expected really. However, it’s going to be short-lived. With time possibly sometime next year, we’re going to see recovery and profit. What is important is knowing when the price bottoms out and buying it then. Cheers.

  7. Hello JH. To be honest , I am really skeptical regarding cryptocurrency whether it is good diversion of investment or not. Maybe because I am not familiar with the market- it’s hard to tell which one to invest and even if you hit the right one, there is no guarantee that no manipulation in the market would occur. I call the whales as the “CAPITALIST INVESTORS” and some maybe, unscrupulous some are not. Being such, their goal is to maximize profit and minimize loss. Having said that- There is a good reason why we (small investor) need to keep an eye on them. They have in their employ learned individuals who have a great skills in forecasting. The market is so volatile that their action can greatly affect it. INVEST AND KEEP WATCHING! 🙂

    1. That’s a very good advise Joyce. You really sound like some investment expert. Expectedly, the whales will continue to leverage their influence to dominate the market. Nevertheless, there is a place for the retail investor. We just have to keep a close eye on the market.

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