A recent report from Chainalysis has drawn our attention. The report describes the degree of concentration in wealth among cryptocurrency holders and how this affects market prices. Research shows that more than 30% of all Ether and more than 20% of all Bitcoins are controlled by a small number of individual holders, the so-called ‘whales’.

What is a whale in trading?

Whales are generally described as holders of a large percentage of a particular financial instrument. It is believed that these large holders can easily cause price movements and volatility by selling only a small percentage of their holdings.

What does the Chainalysis report say?

Chainalysis has found that Ether ‘whales’ can cause more volatility, but that they do not affect the prices of Ether. It is also interesting to see that Ether whales do not often move holdings. This means that the majority of Ether ‘whales’ are not active traders. Another interesting finding is that Ether prices follow Bitcoin prices.

For more information about the research method used by Chainalysis see the full report here.

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