The label of “whale” is one desired by all in the crypto space. Many young investors aspire to be a Crypto whales eventually. According to statistics, in mid-2021, there are only a little over 1,000 bitcoin whales in the world. This makes it a prestigious and desirable club to be a part of. So what exactly is a whale?
Definition
A whale in cryptocurrency is defined to be someone who owns a lot of a specific cryptocurrency. The popular metric that people use is over 1000 BTC. At the time of writing this article, this is equivalent to over $54,000,000.
Connotation
Although, on the surface, being a ‘whale’ is a positive thing, it also has an antagonistic reputation. As whales have higher command of the market, they are often involved in pump-and-dump schemes. They would buy a relatively unknown asset at a lower price and create hype around it. New traders could give in to FOMO and not do their research properly hence continuing to pump up the price. Once it reaches a certain level, these whales would ‘pull the rug’ and take profit, dumping the price significantly.
Many people are aware of the impact whales have on the market; therefore, they often have command of futures trading. Traders with smaller capital will copy the trades of whales so that they will not be liquidated.
Origin of the term
The term whale originated from the casino industry. It was used to describe the richest gambler that plays the highest stakes. It is used in the same way in crypto together, where the ‘whales’ are the ones who own the most Bitcoin.
Whale in a sentence
The term whale can only be used as a noun. Often people would refer to whales when discussing market movements or sentiment. One phrase that is seen often on crypto forums is:
- “The whales are trying to liquidate the shorts.”
This means people with high capital are trying to long the asset and liquidate smaller traders who are trying to short.
Final words
Despite coming with a slightly negative connotation, the position of being a Bitcoin whale is the aspiration of all investors. It is composed of an elite group that is extremely wealthy. With the rise of Bitcoin prices, it is getting increasingly harder to be a whale.
