Overview of Bitcoin’s Ownership Distribution
• Bitcoin’s creator Satoshi Nakamoto had the idea for a decentralized P2P payment system based on a digital currency that was universally accessible.
• Concerns exist regarding the coin’s centralized distribution, with a small number of companies and individuals controlling the majority of its current supply.
• These entities are often referred to as “whales” due to their immense holdings and ability to influence prices.
Who Are The Whales?
Bitcoin whales are large holders who own vast amounts of BTC and wield significant influence on the market. As most coins are held by only a few people, these whales can have an outsized effect on prices when they choose to buy or sell large amounts of BTC at once.
What is Their Influence?
Due to their high holdings, these whales are able to cause significant ripples in the market when they decide to buy or sell BTC. This can be seen in instances where there has been increased buying activity from one whale which has caused an increase in price for BTC across all exchanges. Similarly, when one whale decides to sell off large amounts of BTC it can lead to a sudden crash in prices across the market.
What Does This Mean For The Market?
The concentration of Bitcoin ownership amongst whales means that there is less available supply for general investors and traders, making it difficult for them to purchase larger numbers of coins at once without significantly impacting the market. It also means that these whales have significant sway over prices due to their ability to move markets with just a few trades.
Conclusion
Whales play an important role in cryptocurrency markets as they hold considerable power over price movements due their massive holdings and capacity for influencing markets with targeted buys or sells. While this can be beneficial in some circumstances, it could also be concerning if these same entities start manipulating prices by using their wealth and clout for personal gain instead of contributing positively towards healthy market growth.