Author Topic: Bitcoin Whales Are Not Responsible for Volatility - Chainalysis [Self moderated]  (Read 29 times)

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As the subject line mentioned, this study can be an eye opener for those, who often blames whales for the price dip of bitcoin. A recent study from blockchain analysis firm Chainalysis shows that whales are not responsible for price volatility of bitcoin. I too had the similar idea on it and I have asked one valid question many times in this forum but haven't received a proper reply till date. The question is,

"If I am a whale holding millions of bitcoins, why would I want the price to go down? It will directly impact my holding value and nothing else. What can be one good reason for me to want the price to go down??"

Answer the above question if you have a viable reply! Now get back to the main topic,

Chainanalysis analyzed the transaction history of the 32 largest bitcoin wallets not on exchanges as of August 2018 to develop a taxonomy of whales. They represent roughly one million bitcoins, or about $6.3 billion dollars. The data revealed four basic types of whales as below,

This categorization reveals only a third of the whales are active traders, who regularly conduct transactions with BTC on exchanges. The statement of chainanalysis says,

“a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on net, traded against the herd, buying on price declines.”

Hope this study will clear your mind and misconceptions that you have about the whales!! If you have valid argument to make, I am all ears!

Study link:

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