Robert Steinadler, 5 months ago
The term “Bitcoin whale” stems from the idea that holder of 1,000 BTC or more are the biggest fish in the sea. Of course, whales are mammals, but it is still important to look out what big actors are doing in certain situations.
Why did the Bitcoin whales kept on accumulating and what can we learn from their behavior?
Last year between November and December was one of the biggest sell-offs. While the crypto market was moving in 2022 with close correlation to tech stocks, this sell-off was motivated by the collapse of FTX and Alameda Research.
It appears that this event was striking fear into the hearts of many investors, but encouraged Bitcoin whales to act and accumulate more BTC. Especially Bitcoin addresses holding more than 10,000 BTC were increasing. At the time of writing, 116 Bitcoin addresses hold 10,000 BTC or more and another 19 addresses are holding at least 9,000 BTC but less than 10,000 BTC.
Transaction flow suggests that many of these big players were seizing the opportunity to stack more sats. But what can we learn from their behavior?
Apparently, these entities were interested to get more Bitcoin at low prices. Some analysts and investors are jumping to the conclusion that this is the sign to invest their capital at once. If millionaires and billionaires are moving, why should you wait for an opportunity?
The problem is that we can all watch what is happening on the blockchain, but we don’t know a lot of details about these entities. Are they hedging their bets in the spot market with leveraged short positions? How deep are their pockets and how much of their capital is flowing into Bitcoin?
These are not trivial questions, because if a billionaire or an institutional investor decides to move 0,2 % of their capital into Bitcoin and perhaps hedge the bet with options or derivatives, then this is not exactly creating a buy signal to throw you life savings into BTC. What it tells us is still bullish though. Very wealthy investors are still interested in Bitcoin and they are holding spot positions and extending their exposure to BTC. This could mean that they think of it as a long-term investment and that they are not concerned about short-term price moves even if Bitcoin would find new lows this year.
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