While the Minnows Sell, the Whales HODL

Reading Time: 2 minutes

Bitcoin is controlled by a number of extremely wealthy whales, or so the theory goes, dictating the price of Bitcoin at a macro level, using their influence to dump or raise the price as they see fit. It would be assumed then that these whales made off like bandits when Bitcoin hit $20,000 last year, while the smaller fish in the sea tried desperately to hold on to their portfolio values as the bear market hit. In times like this then, when the minnows are scrabbling around in rock pools trying to guess where Bitcoin will bottom out, would we not be better served to try and see what whales do in a bear market?

Buy, Hold, Buy, Hold

The 100 richest Bitcoin addresses is the best place for mere mortals to see what the Bitcoin whales are up to. The statistics tell us that 0.01% of wallets own around 41% of all the Bitcoin in existence, which sit inside the top twenty biggest wallets. Excluding exchange wallets, this leaves sixteen wallets with a combined one million Bitcoin worth investigating. And, what they reveal is very telling, the total number of deposits to these addresses totals 2,144, which is almost six times more than the number of withdrawals – 361.
Of these sixteen wallets, ten have never withdrawn a single Bitcoin, while all have been adding to their holdings on a regular basis, including this year as the doom mongers have had it in for Bitcoin’s future. What this means in simple terms is that, while the rest of us are running around like headless chickens trying to guess bottoms and panic at every dip, the richest Bitcoin holders are simply doing what they have been doing for years – buying and holding.

Do as the Whales Do

Of course, if you’re super rich then it’s easy to buy more Bitcoin when you want, but it’s the principle we’re interested in. Some of these mega rich holders had little to no interest in selling at $20,000, even those who first bought in 2011 having made unbelievable gains, so they clearly have bigger ideals for Bitcoin – they either plan to sell at a much higher valuation or they are holding on until Bitcoin becomes the next world currency. Either way, they have tremendous faith in Bitcoin’s future, and it doesn’t usually make sense to bet against the millionaires. So, next time you think about selling your stack to try and buy back lower, take a moment to think like a whale and see if selling is really the best option.