In the midst of all the events that have taken place in the world, one of the most curious within the cryptocurrency industry is that Bitcoin whales are still on the rise. But are these Bitcoin whales richer?
According to a recent study by Glassnode, the reality is that in 2020 the number of whales has increased to more than 1800, for the first time since 2016.
Do we have any explanation as to whether the increase in the number of Bitcoin whales implies that they are richer?
The first thing to say is that Bitcoin whales have increased their BTC holdings, but it’s still not that big to consider a very radical change. However, according to Glassnode if his trend continues like this it could be a completely different story.
Likewise, the appropriate differences between individual and institutional whales must be established. Until now, the amount of BTC in the hands of whales had decreased by 22%. But, with the immersion of institutional whales in the market, this percentage has increased.
Despite the increase in whale stocks this year, the balance of BTC in your hands is still well below the peak reached in 2016. This has been developed as shown in the following chart.
Naturally, if the wealth of whales is assessed for their dollar equivalent, this measure will change depending on the value of BTC at any given time. What we do know is that before this year the amount of BTC held by whales had been declining.
However, with this new accumulation, the whales could influence the token to rise in price, as long as the trend in that sense continues.
But, even if this happens, it will not be enough on its own to increase the value of BTC, and the wealth of whales in dollars. Another influencing factor would be whether to generate an increase in market capitalization.
How much is the dominance of these actors in the BTC market really?
Imagine that at one point a farmer produces 10 apples a week, and that someone currently buys 8. In theory, their participation in the total of apples is majority.
But once this same farmer starts mass production, and is more interested in his apples, acquiring most of the production becomes difficult. This is precisely what has happened with Bitcoin whales.
At the macro level, there is indeed an increase in wealth. However, seen from the individual point of view, Glassnode asserts that individual whales are becoming a little poorer.
The average BTC balance held by whales has decreased since 2011. It has also not increased significantly in 2020 along with the number of whales. Thus, the average BTC wealth of each whale has not varied much.
That is, it is not that the whales are getting bigger, but rather that there are more small whales and that is why the BTC balance in the hands of this group is said to have increased. Consequently, it is believed that, generally speaking, Bitcoin whales are richer.
However, much of the recent increase in the number of whales can be explained not by new money, but by existing wealthy entities withdrawing their BTCs from exchanges.
We can see that this decrease in the BTC balance on the exchanges coincides with the increase in the number of Bitcoin whales.