The Volatility is not caused by Bitcoin Whales
The new study of blockchain research firm Chainalysis will show that the Bitcoin (BTC) whales are not the reason for price volatility. The study also examined the 32 other largest BTC wallets which represent around $6.3 billion and almost 1 million BTC.
The BTC whales are the entities and individuals that have a large amount of the cryptocurrency and are explained by the experts that influence on the market volatility. In addition to this, the data of Chainalysis study also reveal that the BTC whales are“a diverse group, and only about a third of them are the active traders. And while these trading whales certainly have the capabilities of executing transactions large enough to move the market, they have, on the net, traded against the herd, buying on a price decline.”
As per the reports of research the firm divide the 32 wallets into generally four groups. In this category, nine wallets consist that usually belongs to traders who usually conduct transactions for the BTC on the exchange. It is also said that this group of owners of BTC control more than 332000 coins that value worth over $2 billion but only one-third of them actively trade BTC.
Most of the traders entered into the market in 2017 and the second group was represented by the early adopters and miners that usually include 15 investors holding the total amount of 332,000 coins. The trading activity of this category is generally ‘extremely low’ although the study shows that most of them are made with significant divestment between 2016-2017 at the time BTC prices soared.
Here, two remaining groups will include generally three wallets of criminals with over $790 million in asset value and also 125000 coins. Among all of them, the lost wallets represent almost over 212000 coins which are worth over $1.3 billion. Later, the research found that since 2011, there is not a single transaction is done from the lost wallets.
The analysis of the trading whales also found that they do not have the volatility intensify during the major declines in 2017 and 2018 when they were net buyers of BTC. According to the research of a study, “That net activity demonstrate that trading whales were not selling off Bitcoins in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were stabilizing, rather than destabilizing factors in the market…”
It goes back in the December 2017, the price of BTC surge to $19000 and it generate the concern that what would happen if 1000 people own almost 40 percent of all the existing BTC cash it out. The managing partner of the Multicore Capital, Kyle Samani also explained that he “thinks there are a few hundred guys. They all probably can call each other, and they probably have.” Sometimes, a coordinated strike by the host of whales was selling it off enough coins a glut in the market.