3 Things To Know About The ‘Whales’ Who Were Behind Bitcoin’s Rise To $42,000

3 Things To Know About The ‘Whales’ Who Were Behind Bitcoin’s Rise To $42,000

3 Things To Know About The ‘Whales’ Who Were Behind Bitcoin’s Rise To $42,000. Image: MMG

Bitcoin just keeps rising and rising. On Dec. 8 it soared to $42,000. Today it is hovering just above $35,000, according to CoinDesk.

The year 2021 has just begun and in its first full week, bitcoin climbed nearly 37 percent, Market Watch reported. But the bubble fizzled soon after, with bitcoin dropping as much as 21 percent on Dec. 10 and Dec. 11. It was bitcoin’s biggest two-day slide since March 2020, wiping $200 billion off the market for itself and other digital coins in just 24 hours.

Still, bitcoin power is becoming undeniable. In fact, its price has added “a staggering 400 percent over the last 12 months,” Forbes reported.

The bitcoin whales are getting some credit for taking it over the top.

A bitcoin whale is a person or entity that holds large amounts of bitcoin. Whales have so much bitcoin that they have the ability to manipulate the currency valuations, according to Investopedia.

1. Large accumulation

Bitcoin whales with addresses that have more than 100 bitcoins, accumulated an additional 47,500 bitcoin in December, researchers at the San Francisco-based bitcoin and cryptocurrency exchange Kraken wrote in a Dec. 7 report.

“Not only did the aggregate number of bitcoin in whale addresses hit its highest level all year — 11.46 million bitcoin — but addresses with a balance of more than 100 bitcoin surpassed 16,300—a reading last seen on March 16, 2020.”

The large accumulation pushed the price of bitcoin up 50 percent through December, with the price rise increasing at the start of 2021, Forbes reported.

The number of bitcoin “whale entities” – clusters of crypto wallet addresses held by a single network participant holding at least 1,000 BTC – also rose to a new record high of 2,140 on Monday, Coindesk reported. This happened despite the fact that cryptocurrency’s price collapsed by more than 20 percent.

2. Whales love the digital gold 

Whales are banking on bitcoin, known as digital gold, and others are following their lead. Bitcoin has become more in demand around the world — with payment platforms such as PayPal adding it to its payment options and pro athletes requesting to be paid in bitcoin. Governments are also taking its potential more seriously. 

Bitcoin’s “reputation as ‘digital gold’ has grown in recent months as governments around the world flood markets with unprecedented levels of freshly printed cash—leading to a surge of big-name investors naming bitcoin as a potential hedge against inflation,” Forbes reported.

3. Whales are hanging on

Bitcoin whales don’t seem to be ready to cash out — even when bitcoin hit all-time highs recently.

Whale accounts have jumped 3.7 percent since December when the number stood at 2,221, according to CoinDesk. At least 6,633 addresses hold more than $10 million in bitcoin, according to BitInfoCharts data, Yahoo reported.

More increases are to come, said Chamath Palihapitiya, chairman of Virgin Galactic Holdings Inc. Bitcoin is “probably going to a $100,000 then $150,000 then $200,000,” Palihapitiya told CNBC.

“In what period I don’t know — five years, 10 years — but it’s going there and the reason is because every time you see all of this stuff happening it just reminds you that, wow, our leaders are not as trustworthy and reliable as they used to be,” the billionaire investor said.