New study suggests Bitcoin whales are not to blame for market volatility

The Bitcoin whales may not be the problem some suggest they are…by Manoj Sharma for CNR

Blockchain research firm Chainalysis has put together a brand new study. In it, it’s concluded that Bitcoin whales are not necessarily to blame for the highly fluctuating state of the cryptocurrency market.

It’s a notable issue, of course. The volatility of the cryptocurrencies is the reason why many refrain entering the market, and even the big bulls worry about them. Often, Bitcoin whales are blamed for the state of the market, with their fat digital wallets filled with a large number of cryptocurrencies.

However, after examining 32 largest 32 BTC wallets which represent 1 million BTC in total, the new study by Chainalysis reports a different story.

In the words of the data analysis, “Bitcoin whales are a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on the net, traded against the herd, buying on price declines.”.

The research further concludes that Bitcoin whales weren’t responsible for intensifying volatility in the marketplace, contrary to what some have been suggesting over the past months.

As the report notes, “that net activity demonstrates that trading whales were not selling off Bitcoin in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market”.

Not everyone will agree with that, of course, But Chainalysis does appear to have done the homework to back its findings up…

Image: BigStock

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