What are Crypto Whales?

Published in El Pais, March 10th 2020.

On March 8th the crypto market took a huge dive with multiple currencies taking a drop of more than 10 percent. This unfortunately is nothing new as these digital coins will see such volatility several times a year. There are various reasons for why this happens, one time it went up and down in a span of a few days simply because China made comments suggesting they would lift their ban on Bitcoin only to seemingly change their mind two days later. However, when the market goes up or down without any external announcements it is usually as a result of someone called a whale, and I am here to warn you about them should you be looking into investing. 

Firstly, what is a whale? A whale is a person or an entity that owns a large amount of a cryptocurrency, large enough that any time they move their currencies it has a significant impact on the market. For example, one day someone sold 13,000 bitcoins, valued at over $115,000,000 dollars. The result was flooding the market with sell orders and the price dropping by 7%. Often very similar to what would happen in traditional investments when everyone is trying to sell their share of the company.

As mentioned earlier it is important to understand these risks associated with cryptocurrency as for the time being, we will often be at the mercy of these major players and one must be ok with it should you want to invest in the cryptocurrency game. Eventually these movements will be less common, but we could be talking years from now. If this is not something you want to be involved in, you should stay away from investing in cryptocurrencies.

About Matthew Glezos 420 Articles
Matthew is Canadian and has a Master in Business Administration. He has international experience in marketing and strategy. He has a strong interest in technology and combines it with the business side.

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