In the crypto world, one way to stay ahead of major market moves is by tracking the activity of the biggest market participants. These large market participants are known as "whales," and they have the ability to move the market both upward and downward. Thanks to the transparency that blockchains provide, it's possible to track the moves of crypto whales in real time using readily available online tools.
Based on a recent on-chain analysis, crypto whales appear to have major positions in both Uniswap (UNI +0.62%) and meme coin Shiba Inu (SHIB +0.13%). Both of these are top-20 cryptos by market capitalization but may not be household names for all investors. Let's take a closer look at why crypto whales might be holding them and whether they might be right for you.
1. Uniswap
In the wake of the recent market meltdown, there has been significant discussion about the relative merits of centralized cryptocurrency exchanges vs. decentralized cryptocurrency exchanges. Centralized exchanges include FTX (FTT 0.34%), Coinbase (COIN 0.69%), and Binance (BNB +0.58%). Decentralized exchanges include Uniswap, which is generally regarded to be the largest, safest, and most liquid. In one recent 30-day period, Uniswap accounted for approximately two-thirds of all trading on decentralized exchanges.
CRYPTO: UNI
Key Data Points
Long story short, the momentum seems to be shifting in favor of decentralized exchanges, where there is less risk of withdrawal freezes or network outages. It is also easier, cheaper, and faster to swap into and out of different positions due to the liquidity they provide. And, since everything is completely decentralized, you don't have to worry about a bad actor at central HQ doing any funny business with your money. As proof of just how popular decentralized exchanges have become, Uniswap just passed Coinbase to become the second most popular crypto exchange trading Ethereum (ETH +2.48%) in the world, trailing only Binance.
2. Shiba Inu
The case for Shiba Inu is more complex, given that it is still too easy to view Shiba Inu as a get-rich-quick meme coin. But, to Shiba Inu's credit, the creators of this meme coin have been taking concrete steps to boost its overall value. The most dramatic step, of course, has been significantly increasing the burn rate of Shiba Inu. The coin launched with a total circulating supply of 1 quadrillion coins, so it is absolutely imperative that Shiba Inu continue to burn coins if it ever wants to get to the $1 price point. A massive oversupply of Shiba Inu means that this meme coin still trades for just $0.000009177.
Image source: Getty Images.
Shiba Inu has also been taking steps to boost the utility of its coin. For example, Shiba Inu has been developing a new online metaverse world where you can use the crypto to buy and sell land. It is also forming partnerships with retailers and real-world merchants to get Shiba Inu accepted as a legitimate payment option. One recent win, for example, includes American Airlines (AAL 0.44%). When you're ready to book your next travel vacation, you can now pay for your flight with Shiba Inu.
Should you follow the crypto whales?
As a general rule of thumb, crypto whales move markets. It's really the same dynamic as in the stock market, where investors make major decisions about what to do with a particular stock based on what Warren Buffett or a major hedge fund is doing. Thus, by making it a regular habit to check what these whales are doing, it could be possible to anticipate upcoming market moves and get a better sense of the overall market sentiment.
At the very least, by poking around the crypto portfolios of major whales, you can get some good trading ideas. And you can also get a better idea of how the biggest crypto investors in the world are allocating their portfolios and how many overall tokens they own.
Buy Uniswap, but not Shiba Inu
At the current time, I can not recommend Shiba Inu. I still view this as a high-risk meme coin with little to no chance of ever hitting $1. However, I can recommend Uniswap as a long-term buy. Even before checking out the latest crypto whale stats, I was bullish on Uniswap and its recent market moves (such as getting into the trading of other digital assets). The fact that Uniswap is the most widely held crypto among the top 100 Ethereum whales in the world just gives me more conviction that this is a solid long-term buy.
