Did you know that it is now estimated a whopping 55% of all bitcoin is held by just 1% of wallets? The people who make up this 1% are known as bitcoin whales, so just who are these people and how do they affect bitcoin?
Diar, which is a blockchain research unit, has recently put together a report in which they published the above findings. And this 55% of bitcoin currently holds a value of approximately $100 billion.
Also, if you want to break things down further then they also revealed that more than half of bitcoin in circulation is held by people with a balance which exceeds 200 BTC (approx. $1.25 million).
The name given to a bitcoin investor with a substantial amount of bitcoin in their wallet is bitcoin whale, and for some people they are becoming a bit of a worry.
The reason for this is that because they are in control of such a large chunk, then if they decide to sell even a portion of what they have in their possession, then it can cause the prices to plummet.
This was proven just last week, when as many of you with a close eye on the price of bitcoin would have seen a sudden drop of 15% in a short space of time. There were rumours circulating on the internet that this was because of a whale who was preparing to sell 30000 BTC ($193 million).
The story came about when people discovered a cryptocurrency wallet which dated back as far as 2011 had distributed smaller sums of bitcoin to a number of different wallets. The transfers took place between August 24 and September 2, which was only a few days before a huge sell of which saw the price plummet.
And as happens in this day and age, many theories started to emerge on the internet regarding who was the owner of the infamous wallet. Some people were even suggesting that it was something to do with Silk Road, the dark web marketplace, which hit the headlines some years ago when it was closed down by the FBI.
So whilst we will probably never know the complete truth behind what happened, as anonymity is of course one of the main selling points of cryptocurrency, it just goes to show how one person can have such an effect on an entire market.
However, one thing many people have noticed when it comes to whales is that despite the falling prices over the past year, these whales are still holding onto their BTC. So does this mean that they’re expecting a price rise?
It could well do, however another theory which has been voiced is that a large amount could be accidentally locked up due to owners losing their private keys. This theory is backed up by the fact that a third of all bitcoin held by whales has never been used for any outgoing transactions.
It could also mean that there are some wise investors out there who have predicted a price rise in the future, thus they are hanging onto their bitcoin before cashing in later.