Whales May Be Going Extinct as Small Investors Take Control of Bitcoin Trading Space
Bitcoin Whale wallet numbers are dwindling, with small investors picking up the liquidity.
In the last five years, bitcoin has undergone some pretty impressive metamorphosis. The cryptocurrency has reached great heights and new lows, ushered in the latest technologies and began to help shape the way many think about finance. There has also been a notable trend in how the coin is starting to flesh itself out, securing its toehold in the consumer market and everyday finance.
What perhaps showcases this slant towards ubiquitous adoption isn’t necessarily the introduction of small investor and new user friendly platforms like Bitvavo– but instead the fact that market value is at an obvious high, while whale wallets have taken a graceful tumble from 62.9% to 49.8%. Highlighting the normalization of the market and whispering of a more widespread adoption.
What Are Whales?
For years, the percentage of supply owned by whales was holding firmly above 50%, which gave rise to some serious concern as to the overall market influence of these entities. Whales, categorized as any entity that hold 100-100,000 BTC in their wallets, are starting to become endangered. But unlike their aquatic counterparts and name sake- this really isn’t a bad thing.
For a long time, perhaps since the general public began familiar with the coin, there were murmurs about the influence that whales had on the market. When bitcoin was created, inventor(s) Satoshi Nakamoto had a unique and groundbreaking paradigm. To create a type of currency that was fully decentralized. A monetary system that was outside of nefarious influence and overarching control. The coin was built to be resistant to things like artificial inflation and quantitative easing practices, leaving users to control the value of the asset- as opposed to governmental entities. Creating a safer environment for the common man and investor.
However, as early adopters of the coin held on to mega stores of the coin itself, it was suggested that these investors- these whales- would influence asset prices by shifting about their enormous holdings. Giving rise to rumors about the type of market manipulation that bitcoin was built to be exempt from. Should a scant few investors hold the majority control of the crypto, it would be easy to see how they could indeed control the overall market price of the asset, but as time marches on, and whales become less prevalent, the ability to control the market in this way dwindles.
Leaving small investors in a much more attractive position and allowing for market values to find an even keel. This gradual dissolution of hordes wealth stores allows bitcoin to function as it was meant to. Coins flow more readily between retail investors and regular holders, creating a genuinely useful micro-economy.
Small Investors Create New Opportunity
The majority prevalence of small investors speaks of a mass adoption of bitcoin, which may be a sign that the coin itself has finally gained the long-sought foothold in global financial markets. While it’s still far from being a household name, more everyday folks are investing- which means that there is more opportunity for innovation and everyday use.
Stock options have long been an enticing investment opportunity in the traditional world of investments, and bitcoin is now starting to see these types of opportunities flood its market as well. Allowing for better choices and higher variety when it comes to how people can invest in the asset.
Bitcoin lending is a unique and favorable option to many who have a less than stellar history when it comes to traditional lending practices. As credit checks aren’t required and lending is offered to anyone who has a bit of capital at their disposal. It also frees up liquidity within the market and gives investors that live by the HODL credo a chance to put their stores to work.
Decentralized Finance (DeFi) and Decentralized Applications (DApps) offer everyone options when it comes to their own finances and needs, without the use of a centralized entity. This can mean financial entities, like banks and brokerages, or legal and administrative services; such as legal contacts and accounting.
What This Could Mean for Crypto
As adoption of bitcoin becomes more commonplace, more use cases arise. Making the coin a genuinely useful alternative to traditional finance systems for those who desire something more global and less restrictive. Because bitcoin is a borderless currency- it allows users to interface with anyone anywhere in the world. Arguably offering up some desirable opportunities when it comes to business and personal finance.
Bitcoin is also pseudo anonymous, so while there are certain KYC protocols that are required in some instances, in order to keep bitcoin safe and legal, most transactions are made without the need for personally identifying details. Blockchain and its associated public ledger technologies also captivate many by providing a fully transparent ledger- which puts users in a better position to supervise their finances, even after they’ve gone elsewhere.
As bitcoin adoption swells, the appeal of a decentralized global financial system also becomes much clearer. Which is exactly what this massive whale migration may be showing us.