Binance
Voyager
Binance
Voyager

A prevailing theory as to why the cryptocurrency market has experienced a significant sell-off in 2018 is that “whales,” investors who hold significant amounts of Bitcoin (BTC), are working to add volatility by dumping their holdings onto the market via OTC markets.

However, a recent analysis by Chainalysis, which provides cryptocurrency tracking tools to companies and law enforcement, shows that this theory is fundamentally misguided.

According to this analysis, which breaks-down Bitcoin’s 32 largest wallets, the greater majority of whales are, in fact, not active traders. Instead, only roughly one-third of the largest Bitcoin accounts, holding┬á$2 billion in coins, have┬áregularly engaged with exchanges to buy and sell BTC.

Of the remainder of the accounts, 33% are classified as miners, early adopters and holders, which includes 15 investors that hold 332,000 coins, worth more than $2 billion. Chaninalysis notes that these investors rarely make trades, and most of their action was seen in 2016-2017, where they made significant divestments.

Chainalysis

The remaining third include “criminal┬áwhales” and accounts that are associated with lost coins. Notably, two of the criminal accounts are associated with the Silk Road darknet market, which became the largest Bitcoin-driven illegal operation before being shut down originally in 2013.

As for the lost coins, these accounts are classified as making no transactions since 2011 and account for a whopping $1.3 billion in BTC. These coins, unless recovered, will likely be counted as a permanent deduction from the total supply of Bitcoin.

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All things considered, the report shows that Bitcoin whales are likely not the hidden hand of volatility, but instead are relatively stagnant in their activity, stabilizing the market.

More: The Not-So-Killer Whales of Bitcoin
Related: Mystery of the $2 Billion Bitcoin Whale That Fueled a Selloff

Disclaimer: This articleÔÇÖs author has cryptocurrency holdings that can be┬átracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

Voyager

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