In the world of bitcoin, there are two groups: institutional investors and whales. Institutional investors like Goldman Sachs are becoming important crypto investors, but whales have been here since the first days of cryptocurrency, especially in Bitcoin. But who are they? The whales metaphor holds well — these are the largest hodlers (holders, in bitcoin language) of BTC, most of them surface from time to time and affect the market.
The most famous whales are those who you’re not likely to see, or at least not know it if you do. That would be the person or people called Satoshi Nakamoto, who invented the modern cryptocurrency and mined the first bitcoin on 3 January 2009. Because we can determine what wallets to store the bitcoin he mined, we can guess that Satoshi has about one million bitcoin, though the full extent of his holding is not known. Any trading activity from these wallets would create a splash throughout the crypto community, since his true identity is the subject of conjecture.
At the other end of the spectrum, the Winklevoss twins, Tyler and Cameron, live in the limelight, and through their well-known Gemini cryptocurrency exchange, specialize in the trading of cryptocurrency, both bitcoin and altcoin, for institutional investors. They are probably the most famous investors, especially after buying $11 million in bitcoin in 2013 following a successful lawsuit against Mark Zuckerberg and Facebook. It’s estimated that at one time, the Winklevoss twins owned 1% of all bitcoin mined.
Not all cryptocurrency whales are individuals. Pantera Capital, which was established in 2013, is the most famous as the first bitcoin investment firm in America. Pantera Capital’s mandate to invest into blockchain and digital asset-related companies comes from its founder, Dan Morehead, who is also on the board of Bitstamp, a cryptocurrency exchange that CME uses for obtaining bitcoin and altcoin spot prices.
Cryptocurrency whales are mentioned often when bitcoin prices drop sharply and suddenly, before analysts can find any reason. True or not, whales are often accused of market manipulation too. Because the market capitalization of the crypto space is still relatively small, a large-scale move on a cryptocurrency exchange by whales would affect to the market significantly. However, the relative illiquidity of the market is why institutional investors often buy digital currency from whales via Over The Counter (OTC) trades. In this way, the parties can negotiate on price without affecting the market as a whole.