Similarly, a Bitcoin whale is one of these large holders of Bitcoin. As of the end of May 2022, Bitcoin had a market cap of nearly $609 billion. Definitions vary, but a Bitcoin whale is generally referred to as a wallet that owns at least 100 Bitcoins -- or $3.2 million worth of Bitcoin as of this writing.
Bitcoin whale watching
As crypto investing and use has become more common, Bitcoin ownership has become less concentrated. However, studies suggest that a small handful of investors control a large chunk of the total Bitcoin supply. A 2021 study from the National Bureau of Economic Research suggested that one-third of all Bitcoins are owned by just 10,000 investors worldwide.
Given this apparent concentration of ownership, Bitcoin whales are closely watched by crypto traders since Bitcoin whale buying and selling activity can affect prices in the short term.
Cryptos are bought and sold on exchanges and operate on an auction system similar to the stock market. If a Bitcoin wallet is buying large amounts of crypto, the whale’s activity could reduce the supply of Bitcoin being sold on the market, thereby raising prices. Conversely, a whale who is selling could increase supply, which could temporarily lower prices for Bitcoin.