Crypto Whales: Who Are They and How Do They Influence The Market?

Home / Blog / Trading Lessons / Crypto Whales: Who Are They and How Do They Influence The Market?

In crypto, a powerful group called crypto whales can significantly shape the market. These whales are individuals or entities holding huge amounts of cryptocurrency. When they make their massive trades, it can cause a lot of volatility in the market.

Traders sometimes closely track what whales are doing because understanding their behavior can provide valuable insights into the market. So, who are these crypto whales, and how do they influence the market? And is tracking them a good strategy?

Let’s explore this crucial topic.

Table of Contents

Key takeaways

Definition and influence: Crypto whales are large holders of cryptocurrencies. They often own significant amounts of crypto and can influence market dynamics through their transactions.
Market impact: Whale activities can influence market prices and increase volatility. This can cause FOMO (Fear of Missing Out) or FUD (Fear, Uncertainty, Doubt) and affects overall market sentiment.
Liquidity and volatility: Accumulation by whales decreases market liquidity, while sell-offs increase supply. It can lead to price drops and large buy orders elevate prices.
Tracking techniques: Tools like Whale Alert and DeBank help track whales and their transactions, so you get real-time updates on what the whales are doing.
Investor strategies: Tracking whales lets you anticipate potential price movements before they happen and helps you manage risk.

Who and what are crypto whales?

Crypto whales are the heavyweights of the crypto markets. These are individuals, institutions, or organizations that hold massive amounts of cryptocurrency, typically at least 1,000 BTC or equivalent.

Their sheer wealth gives them the power to influence the market’s direction.

For example, when a whale decides to buy or sell large amounts of cryptocurrency, it can create noticeable price changes, either driving prices up or causing them to fall.

But who are these whales? They can be early Bitcoin adopters, large companies investing in crypto, or even crypto exchanges managing substantial funds. Institutions like MicroStrategy and Tesla, as well as anonymous individuals with dormant wallets, are often considered whales.

The influence of whales can go both ways. While their moves provide opportunities for smaller traders to follow trends, they also add unpredictability.

How do crypto whales influence the market?

Crypto whales hold the power to move the market in different ways. Their actions, whether buying or selling, can shift cryptocurrency prices, alter liquidity, and influence the overall sentiment of traders.

Price movements

When a whale sells a large quantity of cryptocurrency, it increases the supply in the market, which drives prices down. This sudden drop can lead to panic among smaller traders. It causes them to sell their holdings and increases the downward trend.

Conversely, when whales buy large amounts of crypto, they reduce supply and push prices higher, which can create a bullish atmosphere and encourage more buying.

Liquidity impact

Liquidity is deeply affected by whale activities. Accumulating large amounts of cryptocurrency decreases the available liquidity, which makes it harder for other traders to buy or sell without impacting prices.

On the flip side, when whales sell off their holdings, liquidity temporarily spikes. This can often be accompanied by sharp price fluctuations. These fluctuations create challenges for smaller traders who may struggle to execute trades properly.

Market sentiment

Market sentiment (aka the overall mood of traders) is another critical factor tied to whale behavior.

Significant sell-offs by whales are often seen as bearish signals, leading to fear and uncertainty. In contrast, when whales accumulate cryptocurrencies, it can be interpreted as a vote of confidence in the market’s future, resulting in optimism and increased buying activity.

These emotional responses are often magnified by media coverage, as public reports of whale movements can create waves of reaction among investors.

Traders can benefit from understanding how whales influence the market. Their actions influence immediate price changes, but they also set the tone for broader market trends.

Biggest crypto whales in 2024

Crypto whales are not just anonymous figures; many have made headlines due to their significant influence in the market.

Here are some of the most notable whales in 2024:

Changpeng Zhao (CZ): Former CEO of Binance, Changpeng Zhao, is one of the most well-known in the crypto space. Binance’s vast reserves of cryptocurrencies make him a major player in the market, capable of influencing prices through strategic trades or announcements. Even though he stepped down as the CEO of Binance, he still holds a lot of influence in the space.
Brian Armstrong: As the CEO of Coinbase, Brian Armstrong oversees one of the largest cryptocurrency exchanges in the world. His holdings, both personal and through Coinbase’s reserves, make him a key market influencer.
The Mt. Gox trustee: Despite being a relic of an earlier era, the Mt. Gox trustee still holds a significant amount of Bitcoin. Decisions to liquidate these holdings continue to send ripples through the market, which affects price stability.
MicroStrategy: Led by Michael Saylor, a big fan of Bitcoin, MicroStrategy has accumulated vast amounts of Bitcoin as part of its corporate treasury strategy. This institutional whale’s actions are closely watched by traders.
The Winklevoss Twins: Founders of the Gemini exchange, Tyler and Cameron Winklevoss are well-known Bitcoin advocates and hold substantial amounts of cryptocurrency, making them influential in market trends.
Elon Musk: Of course, this list wouldn’t be complete without Elon. Known for his unpredictable tweets, impulsive attitude and massive influence in the crypto world, Elon Musk’s companies, including Tesla, have held huge amounts of Bitcoin on their balance sheets. His public statements and market activities often lead to big price swings. And, with his new position in Trump’s cabinet, his influence is expected to grow even more.
Anonymous early Bitcoin adopters: Some of the largest Bitcoin wallets belong to anonymous early adopters who mined or acquired Bitcoin when it was virtually worthless. You know Laszlo Hanyecz, the programmer who bought two pizzas with 10,000 Bitcoin in 2010? Well, these are people like that, except without spending Bitcoin on pizzas.

Crypto whale tracking

Crypto whale tracking is a strategy that some traders use to give themselves an advantage in the market. By monitoring these large investors, they can anticipate potential market movements before they happen.

Let’s explore what crypto whale tracking is, how it works as a strategy, and what tools you can use to do this yourself.

What is crypto whale tracking?

Crypto whale tracking is the practice of monitoring and analyzing whales’ large transactions.

There are tools that can provide real-time alerts and notifications on large transactions from whale accounts so that you can anticipate potential price shifts based on these movements.

Here are some key points to keep in mind:

Whale activity indicates market sentiment. Large buy orders often indicate bullish trends, while significant sell-offs may trigger panic selling among retail, “non-whale” investors.
Market transparency: Monitoring whale transactions can increase your market awareness. Real-time insights on large transactions can give you information about potential liquidity changes, price changes, and overall market dynamics.
Approximately 113 wallets own around 15.4% of all Bitcoin, and 4 wallets own around 3.56%. That might not seem like much, but it actually is. If even 10% of all Bitcoin got sold at once, it could cause a negative effect and send the value of Bitcoin tumbling down.

Whale tracking as a strategy

Let’s take a look at how you can use tracking whales to your advantage.

An important strategy is analyzing accumulation patterns. When whales buy large amounts of cryptocurrency during market downturns, it often indicates bullish sentiment. When you observe this, you can predict potential price increases and position yourself accordingly.
On the other hand, monitoring dormant, inactive accounts that suddenly become active can signal upcoming market changes. For example, when previously inactive whale wallets begin transferring funds, it may indicate preparation for large transactions that could impact prices.
Awareness of whale activity lets you understand market sentiment better and helps you manage risk. It’s not just about predicting price movement. Knowing when and where large holders are moving their assets allows you to avoid being caught off guard by sudden price swings.
Also, tracking whales can reveal broader market trends, such as shifts in liquidity or emerging patterns in accumulation and distribution.

How to track crypto whales: popular tools

Several tools are available to help you monitor whale activities effectively. Here are some of the most popular tools for tracking crypto whales:

Whale Alert is a widely recognized platform that provides real-time alerts on large transactions across multiple blockchains, including Bitcoin, Ethereum, and more. It continuously scans blockchain networks for significant movements and sends notifications via its Twitter account and Telegram channel. Users can also access a paid API for deeper insights and personalized alerts.
Nansen is an advanced on-chain analytics platform that specializes in tracking wallet addresses and token movements. It features a unique “Smart Money” function, which lets you analyze the behaviors of successful investors. Nansen tags wallet addresses based on their activity, so you can easily track whale movements across various cryptocurrencies. It offers a free tier, but many of its advanced features require a subscription.
ArbitrageScanner is primarily known for its arbitrage capabilities but has recently expanded to include comprehensive whale tracking tools. This platform allows users to conduct in-depth wallet analyses to reveal historical data such as trading volume and profit/loss figures. It is particularly useful for identifying profitable wallets across Ethereum, Polygon, and other blockchains. The AI-powered search feature helps you find similar wallets based on their trading patterns.
Etherscan is a leading blockchain explorer specifically designed for Ethereum transactions. You can search for specific wallet addresses, view their transaction history, and monitor token transfers. Other chains have their own versions, such as BSCScan for Binance, or PolygonScan for Polygon.
Whalemap provides visual analytics focused on whale activity for Bitcoin and select ERC-20 tokens. It offers unique metrics like HODL waves and address waves, which can indicate market trends based on whale behavior. Users can track large wallet inflows and unusual transaction volumes. It’s great if you want to understand broader market dynamics rather than track specific wallets.
DeBank is a DeFi portfolio tracker that also includes whale-tracking functionalities. It allows users to monitor the portfolios of top DeFi investors and gain insights into their trading behaviors. This platform is particularly useful for traders interested in DeFi.

How to protect yourself against whale manipulation?

While you can and should track whales to see what they’re up to, it’s also a good idea to keep yourself grounded so as to protect yourself against whale manipulation. People who hold hundreds of millions in crypto can obviously affect prices fast and significantly, and you need to be prepared for that.

Here’s what we suggest:

Monitor whale activity: We already mentioned this, but using tools like Whale Alert to stay aware of significant transactions can help you anticipate whale actions and be ready for when it happen.
Diversify your portfolio: Spread your investments to reduce exposure to sudden price fluctuations caused by large sells or buys from whales.
Set stop-loss orders: Protect your assets from drastic price drops triggered by whale sell-offs, minimizing potential losses.
Avoid panic selling and FOMO buying: Whales often capitalize on emotional reactions from retail investors. Stay calm during market volatility and consider strategic buying opportunities.
Analyze historical patterns: Study past whale transactions to anticipate possible trends. Make calculated choices and adjust your investment strategies accordingly.

TL;DR

Crypto whales are large holders of cryptocurrencies who greatly influence market dynamics through their huge transactions. To stay ahead, track their activities using tools like Whale Alert, Nansen, Whalemap, or some of the other tools we mentioned.

If you can anticipate what whales will do, it will give you a big advantage in the markets. There’s no reason not to use this.