A blockchain data intelligence firm Glassnode recently published a report analyzing the whale activity and investigating the source of their ever-growing influence. The report tried to estimate the power of whales in Bitcoin terms, analyze individual activity, and find out where whales, on the whole, are emanating from.
Whales are growing in number, however, they’re not getting richer
For the first time since 2016, whales – broadly described as entities holding at least 1000 BTC – are seeing an increase in number. However, contrary to expectation, they are not as influential as they used to be in the past.
Back then, their wealth used to be higher due to the growing market capitalization and spread among the lower number of adherents. Now, with market cap remaining compact, they most likely won’t reach the same level of significance as during the high fever pitch of 2017’s closure – even in spite of a similar growth-in-number trend.
This is further proved by a declining number of BTC in individual storage.
Wealthy entities are withdrawing their BTC from exchanges
The whales’ mass exodus from exchanges signified an active opening for huge withdrawals of their possessions from centralized exchanges. This led to the situation displayed on the below graph when the decline in BTC balance on exchanges coincided with the growing number of whales.
Whales also were behind a series of active withdrawals after the Black Thursday crash of 2020, when the prices of stocks plunged close to 50% in one day, hitting the lowest level since the financial crash of 2008.
What triggered the change? Some of the whales switched over to private wallets, deeming them to be more secure than exchanges. Others went in favor of venture capital funds, which is thought to be the reason behind the current market bearish movement and possibly the reason for the next bullish trend.
On the whole, as long as there’s unrest among whales, the price of major cryptocurrencies will not be left in tranquillity. But luckily, these days it’s possible to track down the activity of all major whales, which allows one to look one step ahead and make prognostications as to how BTC will behave in the closest future.