What is a CryptoWhale?
When talking about crypto, you may have heard talk about what the whales are doing or seen someone complain that whales get all the good NFTs. But what’s a whale? Is there a difference if a whale is in crypto or NFTs? Read on to learn more about whales and what they do!
What’s A Whale?
Those of you who play gacha games may already have heard the term. In crypto, a “whale” is a person or entity who holds a large amount of a given cryptocurrency.
There’s no specific valuation that the entire community agrees on that qualifies someone as a whale. Some sites consider someone who holds more than 1 million dollars worth of digital currency to be a whale, while others may consider someone who holds 1,000 BTC a whale.
Regardless of the exact valuation, the important part is that they have a lot of it. This means that their transactions can affect crypto markets.
The term also applies to NFT collectors, though in this context it gains a slightly different meaning. If referring to NFTs, a whale can be a collector who has a portfolio of digital assets worth millions of dollars. Alternatively, a whale may be someone who owns a large number of NFTs in a collection.
They might also be a celebrity with a substantial social media following. Even if these celebrities don’t hold a lot of NFTs compared to other types of whales, their social media presence means that their actions are visible to many.
All these types of NFT whales have the same overall effect on the market. Just by transacting in NFTs, a whale can affect the market and thus have an effect far beyond what the average individual user is capable of.
How Whales Affect The Market
Whether it’s crypto or NFTs, a whale affects crypto markets just by transacting in them. What does that mean for you?
Since your transactions don’t affect the market, you have to follow what it does and how it’s doing. In contrast, whales can cause prices to change just by buying and selling whatever they have or whatever they’re interested in.
A whale’s transactions in a cryptocurrency exchange have knock-on effects on the market. Significant movement in a given currency can affect its valuation, so a single whale has the power of a large number of individual users.
As the whales affect the market, individual users will likely move with them. Note that this works both ways. You can just as easily gain as you can lose, depending on whether a whale has decided to buy or sell whatever’s caught their attention.
Even if a whale doesn’t make a market-affecting transaction, it may still be worth it to follow their crypto wallet and the transactions they’re making. It’s the same thing as day traders looking at whatever major traders like Warren Buffett are buying. Since the whales know which crypto tokens are worth their money, it’s safe to say that whatever a whale buys is probably also going to be good for you, the average trader.
A good example of this is SHIB, the Shiba Inu digital currency. Ethereum whales have purchased large amounts of Shiba Inu coins multiple times, each time driving its market capitalization up. However, whales are not infallible. Though SHIB has risen as a result of these purchases, the increase hasn’t stuck and it’s gone down again.
It’s the same deal with NFTs. Someone with the money and the following of a whale can have their pick of the market, and these people want their money’s worth out of their purchases. Plus, their actions are visible – not just to whoever’s monitoring OpenSea or their wallets but also to their followers. This puts a spotlight on the collection or artist that they just purchased from, potentially spurring some of those followers to do the same.
Don’t underestimate whales, especially the celebrity ones. One purchase from a whale can trigger a flood – some NFT collections are worth a lot simply because of celebrities buying them.
Final Thoughts On Whales
It might look like jumping on a bandwagon, but it can be worth it to follow what whales are doing on crypto exchanges. After all, they’ve got so much invested that they want their money’s worth out of their purchases. Keeping an eye on what the relevant whales are doing can help you decide what to buy and what to avoid.
Furthermore, how whales move and transact can affect your investments. Even if you don’t follow a whale’s purchases to turn a profit on your own portfolio, monitoring their activity can help you move better with the market.
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