Bitcoin Whales Explained: Who They Are and Why They’re Important

What Is a Bitcoin Whale?

There are a number of fundamental differences between the world of Bitcoin and the traditional financial system. The most significant point of divergence is that Bitcoin is not regulated by centralized financial institutions. But the one thing the two have in common is the one-percenters. In the world of digital currency, these investors are referred to as Bitcoin whales.

They usually have between 1,000 and 1 million BTC. The philosophy behind the name is simple – they represent the biggest players in the Bitcoin network.

Big Fish in a Small Pond

Crypto whales tend to have more clout in their niche market than whales in other industries. That’s because the Bitcoin market is smaller and more hermetic than markets using traditional currencies. 

For starters, there is a limit on how many Bitcoins can be harvested. This creates a situation where those with large Bitcoin reserves have a tremendous effect on the crypto economy. The Bitcoin ecosystem is already volatile, and changes in Bitcoin trading volumes have a significant impact on Bitcoin prices.

Another thing that makes whales in the Bitcoin market more powerful is the process of Bitcoin halving. Halving reduces block rewards and the number of Bitcoins entering circulation. As such, there is less room for other users to accumulate larger Bitcoin reservers.

Whales can also impact the market by selling a large portion of their Bitcoin at once. Any such move would force the value of Bitcoin to plummet. It goes without saying that traditional currency billionaires possess the power to steer the economy in a certain direction. But Bitcoin whales have a far greater impact on the crypto market.

The Field Broadens

While the Bitcoin system makes it hard to usurp whales due to the nature of this economy, it doesn’t mean that new whales don’t join the club regularly.

For example, the total number of whales hit a two-year high just before the March halving. The current number of whales is around 1,850. But the size of their fortunes vary. Anyone with over 1,000 BTC, currently the equivalent of $7.7 million, is considered a whale, and some have billions in bitcoin. 

Halving is always a tumultuous event in the bitcoin world, and if the number of cryptocurrency whales is rising, it means that users have high expectations concerning future Bitcoin prices.

However, those in the upper echelons of the Bitcoin community rarely trade with all of their reserves. There are multiple reasons for this. For example, the mysterious inventor of Bitcoin, Satoshi Nakamoto, never trades with his fortune, probably so as not to upset the balance of the market. Other whales who are generally the biggest Bitcoin investors, treat the digital currency like a stock market but never trade with their entire balance.

The growing number of whales is also a cause for concern. The fact that so many people acquired massive Bitcoin reserves is exposing the market to potential risks. If any of them decided to exchange a large amount of Bitcoin, it could have a devastating effect on Bitcoin prices.

Bitcoin Whales Stats

So, who are these Bitcoin whales and how large are their fortunes? The whales hold 42% of over 18 millions Bitcoin that are currently in circulation. When we look at Bitcoin and whales’ wallets, the fastest wallet currently holds 255,502 BTC or $1.94 billion. The second and third largest wallets have 125,500 BTC ($953.8 million) and 101,857 BTC ($774.1 million) respectively. 

Here is a further breakdown of Bitcoin fortunes:

• There are currently 1998 Bitcoin whale addresses. That’s 0.01% of all existing Bitcoin addresses.
• Whales have a cumulative wealth of 4.88 million BTC.
• 108 addresses have more than 10,000 BTC.
• Three addresses have over 100,000 BTC.

Although Bitcoin public addresses can be seen by everyone, there is no way of knowing who they belong to. Bitcoin transactions can be tracked because any movement of the digital currency through the network has to be verified and added to the block. When a crypto whale moves a larger amount of currency, people tend to notice. However, we cannot connect public addresses to actual people. 

Besides the benefit of anonymity, holding or transferring Bitcoin is much cheaper than traditional currencies. While buying and selling Bitcoin is taxable in many countries, there are no bank fees involved. In January 2020, one of the Bitcoin whales moved $1.1 billion worth of Bitcoin and only paid an $83 network fee.

Famous Bitcoin Whales

Wondering who was able to amass all this cryptocurrency? We’ve compiled a list of some of the more famous individuals (and governments!) who fall under this category.

Satoshi Nakamoto 

This is the name being used by the person or persons who developed Bitcoin. The individual’s true identity has never been revealed, but he is estimated to hold around 980,000 BTC. 

You may have noticed that there is no single address holding this much Bitcoin. That’s because each Bitcoin whale, including Satoshi, holds their balance across multiple addresses. In Satoshi’s case, there are probably thousands of them.

So, who is the richest Bitcoin owner? The answer is definitely Satoshi Nakamoto. Satoshi never traded his Bitcoin fortune, which he amassed by mining the currency immediately after its inception.

Cameron and Tyler Winklevoss

The Winklevoss twins were among the first people to get rich with Bitcoin. Their initial investment came after a settlement with Mark Zuckerberg, whom they accused of stealing their idea for Facebook. They were paid $65 million, which they used to buy 1.5 million BTC. They eventually became the most well-known Bitcoin whales. 

Shortly after they purchased their Bitcoin, the value of the digital currency jumped by 20,000%. The dramatic spike made them billionaires. Today, the twins regularly invest in Bitcoin and other similar ventures.

Governments

Several governments have a massive stash of Bitcoin. But these states don’t specialize in Bitcoin trading. Most of these state-owned fortunes were acquired through seizures of illegally procured Bitcoin. The cryptocurrency is very popular among criminal elements due to the anonymity that it offers.

Uncle Sam and more specifically the US Justice Department have been hoarding Bitcoin for years and now have one of the largest cryptocurrency caches in the world. The majority of that Bitcoin came from shutting down the infamous Silk Road – an online forum used primarily for the distribution of illicit drugs. 

The Bulgarian government also has a Bitcoin fortune, which it amassed by seizing the currency from tax evaders. While states are not considered to be typical whales in the crypto world, they still exert huge influence due to the amount of Bitcoin they have.

Tim Draper

Tim Draper is among the few publicly known Bitcoin heavyweights. He’s also one of the most vocal advocates of Bitcoin, and various parties rely on his predictions about what the future holds for digital currency. He came into his initial Bitcoin fortune when he spent $18 million on 30,000 BTC at a government auction in 2014.

Barry Silbert

Barry Silbert, just like Tim Draper, is a venture capitalist that reportedly entered the Bitcoin market through a government auction in 2014. It’s believed that Silbert bought 48,000 BTC that the FBI was auctioning. As you can see from these two examples, the whales in Bitcoin are often people who were extremely rich to begin with. Silbert is now the CEO of the Digital Currency Group.

Roger Ver

Ver is also known as “Bitcoin Jesus” for being one of the early investors in Bitcoin-related startups and projects. Before baptizing himself in Bitcoin, he was better known for selling explosives on eBay, which got him a 10-month prison sentence. He later acquired a Saint Kitts and Nevis passport before renouncing his US citizenship. He is currently designated as one of the more prominent members of the Bitcoin whales club.