Taking a look at the potential dangers that can be caused by the Bitcoin whales

The cryptocurrencies were not very famous before the rise in the price of Bitcoin in the year 2017. After the realization of the potential of the cryptocurrencies many other cryptocurrency coins have been invented and also the cryptocurrency community has been expanded a lot.

The discussions which happen on various cryptocurrency forums require the usage of certain situations or conditions, which might not be understood without elaborating them, hence certain slangs are being used instead of using those complicated explanations for a seamless discussion on the forum.

A Bitcoin Whale is one among such crypto lingos used in the Crypto space. Some of the other slangs used in the Cryptocurrency world are Shitcoins, Altcoins, Hodl, shill, bull, bear, bull trap, etc.

The Bitcoin Whale

A Bitcoin Whale particularly refers to the investors which possess a huge amount of investments in the cryptocurrency space. Any transactions done by the cryptocurrency Whales impact the market price of that particular cryptocurrency by a larger margin than the transactions which are done by any other normal investors.

They are the investors which the cryptocurrency space is mostly worried because it somehow violates the core concept of the cryptocurrency space which is decentralization. According to some studies it has been found out that 40% of the total cryptocurrency market is owned only by 1000 huge investors.

It is also to be noted that the large institutional investors are into the cryptocurrency market form from their initial days itself. They have been holding onto the huge investments from the beginning itself and the situation is very dangerous because they can control the cryptocurrency market by collaborating with other such Whales. They can either prop the prices or tank it, at the same time according to their wish.

Bitcoin whales manipulate the market

In this particular situation, the regulators are also not very clear about the cryptocurrency space. It would be considered a fraud if the Whales manipulated the cryptocurrency market along with spreading rumors on various online forums. Bittrex, one of the most famous and biggest cryptocurrency exchange recently issued a circular to its users stating that the user’s account would be closed if many huge institutional investors collaborated with each other into ‘Pump groups’ with an intention to manipulate the cryptocurrency prices.

According to U.S. Securities and Exchange  Commission, the law which would be enforced in this matter would be different for different cryptocurrencies because each one of them is structured and is operated in a very unique way. On the other hand, some of the huge and early investors are sad by this decision because they feel that they are not being provided with the freedom to do anything they want with their money.

As the time passes by it would be a greater disadvantage for the smaller investors. According to report top 100 Bitcoin addresses held almost 17.3% of the Bitcoin share, the top 100 Ether addresses held almost 40% of the share, and as we move along the most recent cryptocurrency coins, the top 100 cryptocurrency addresses held almost 90% of the total share. This is certainly not a good situation and is more likely in becoming very similar to the traditional banking system which we had. This step seems to be backtracking to the traditional problems that were there with the banking and financial system.

Ironically the cryptocurrencies where initiated in order to solve this problem and now we observe that the cryptocurrency space itself is again shifting towards the same problem. Some of them even argue that this situation is very similar to that of the established markets such as equity deals where a large amount of investment is held by the founder and a few investors itself. Some of the experts even believe that the whales would not be a major problem to the cryptocurrency price fluctuations as many of them are happy in their huge investments in Bitcoin or any other cryptocurrencies.

Long story short, if we observe the situation from large holders perspective then it is obviously not illegal that they transact with their huge amounts of cryptocurrency because after all, it is there money. Bitcoin whales may or may not prove to be a threat to the small investors.

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