Whales are sometimes the terror in the imagination of the crypto community
The Bitcoin and cryptocurrency industry comes with its own set of drawbacks and one of the main ones is manipulation by whales. Large entities that move assets in the sector have been a common issue in recent years and the price has been impacted repeatedly due to large orders for transactions.
A recent example was mentioned in the recent intotheblock’s, present in medium website post. In May 2020, 50 Bitcoins dated 2009 facilitated movement in the ecosystem after a Twitter bot claimed that the transaction could have come from a wallet linked to Satoshi Nakamoto.
This sparked a number of theories in the industry, but the post suggested that the main portfolios that make such moves do not necessarily mean manipulation.
Bitcoin manipulation only
According to the medium blog, most of the whales in the industry become major coin / token holders due to some factors. These whales created an organization linked to digital assets or were extremely early adopters who entered the crypto space. Therefore, they usually have an additional advantage over the average investor.
Whenever a large entity like Gayscale dives immensely into the sector (Grayscale acquired a total of 18,910 BTCs from May 11th to 29th), this probably indicates that there is a sign of confidence as investors continue to increase their original position in the ecosystem. The report added:
“Although 18,910 BTC may seem like a large number, Bitcoin is still highly decentralized. When the asset is highly decentralized, it is less vulnerable to the action of whales. ”
Even though every large transaction may not indicate manipulation, it usually leaves its mark on the industry. Previously, was reported that greater transfers are perceived with a feeling of uncertainty, which can produce negative effects, but is not always direct. The effect may also depend on the type of transfer, such as deposits and withdrawals in cold wallets, deposits and withdrawals in hot wallets or transfers outside exchanges.
Although large transactions are seen most often through the lens of “manipulation”, this is not always the case and the overall value of the transfer creates an unintended price divergence.