Mammals of significant influence
The term “crypto whale” sounds somewhat predatory.
In many cases, investors fitting this description can be. Sometimes, they need to be.
However, mostly it is a cryptocurrency that needs to watch its back when the whales are circling.
One wrong move and these giants of the market will chew it up and spit it out like three-day-old Turkey.
However, winning their favour can also help a platform ride a long and beautiful wave.
Make-or-breakers
By definition, a crypto whale is an individual or entity that holds a large amount of cryptocurrency.
This makes them incredibly powerful – and dangerous – players in the market.
Because their transactions are far bigger than those of the average investor, their activities can heavily influence a cryptocurrency’s price and liquidity.
Alarm bells go off when a whale chooses to sell digital assets as this usually indicates that they are unloading their holdings for some or other reason.
Close attention is also paid to blockchains that grant governance voting rights to crypto holders.
It stands to reason that the more crypto a person holds the greater his or her influence over blockchain development will be.
Should they choose to benefit themselves by virtue of their holding status, a blockchain is likely to become less decentralised.
ETH of fresh air
There is another side to the coin, so to speak.
While crypto whales often are accused of manipulating the market, their activity can also help boost it or, at the very least, a platform that may have taken their fancy.
Ethereum, the world’s second-largest cryptocurrency, has become just such a platform.
Recent data has even indicated that whales may be preferring ETH, Ethereum’s native token, to Bitcoin.
Figures from blockchain analytics platform Lookonchain show one whale made two swops, exchanging 502.8 Bitcoin and 1,969 Bitcoin for 14,500 ETH and 58,149 ETH respectively.
By no means is this investor alone in their Ethereum obsession.
Another whale added $445 million to a large leveraged Ethereum long position in a matter of only four days.
Small users staying away
These activities of course raise the question: what do the whales know about Ethereum that others don’t?
It is no secret that fewer smaller users have been using the network, despite a rebound in the Ethereum to USD price.
In other words, activity has been slow.
So why are large-scale investors having a whale of a time with ETH?
The answer may not be nearly as cryptic as crypto conspiracy theorists may think.
Powerful index of compatibility
The word is well and truly out that Institutional support for Ethereum is booming.
It is far ahead of the pack in terms of its settlement layer and earning more institutional confidence by the day.
And the same time growing numbers of investors believe that Ethereum’s value is poised to strike.
One model even suggests that the $62,000 mark is not unattainable.
Then there is the fact that developers love the platform for a variety of reasons, including smart contract functionality that enables decentralised applications (dApps) without intermediaries.
That is a powerful index of compatibility in the world of whales.