What is a Bitcoin Whale?

Written by Sean GraytokUpdated: 23rd Feb 2021
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“Crypto” Twitter and Reddit users have created countless slang words to describe Bitcoin investors and their behavior. While the term “hodl” (hold on for dear life) might be Bitcoin’s most famous expression, “whale” is right there with it.

This article will define a bitcoin whale, explain why they matter and reveal the most famous bitcoin whales.

What is a Bitcoin Whale?

A bitcoin whale is an individual or entity that holds enough bitcoin to potentially manipulate the cryptocurrency market. Large bitcoin holders can affect the average investor’s market; hence the “whale” disturbing the waters of fish.

The ocean metaphor continues to describe more of the crypto ecosystem. Here is more of the jargon:

  • Ocean = Bitcoin Market
  • Whale = Large Bitcoin Investors
  • Fish = Small Bitcoin Investors
  • Waves = market Moves
  • Feeding Frenzies = Rallies

Why do Bitcoin Whales Matter?

According to BitInfoCharts, three bitcoin wallets own 7.39% of all the bitcoin in circulation. The top 100 wallets hold 31% of all bitcoin.

With such a large amount of bitcoin controlled by such a small number of people, some worry that the average investor is at the whales’ mercy.

For example, some believe the 2017 bull run up to $20k was led by whales, and then they sold at market highs to take their profits. Remember, Bitcoin is not regulated, and there is nothing stopping whales from conspiring.

Who are Famous Bitcoin Whales?

While there are many, these are the bitcoin whales that stand out amongst a crowded pack. They are visionaries, innovators, and undeniably – bitcoin bulls.

Satoshi Nakamoto

Estimates suggest that Bitcoin’s anonymous inventor, Satoshi Nakamoto, owns around one million BTC. Satoshi began mining bitcoin immediately after its launch in 2009 and built his fortune through the mining rewards.

Satoshi is the biggest Bitcoin whale, and he has never traded any of his bitcoin. However, no single wallet address holds this much Bitcoin, as it’s common practice for whales to store their Bitcoin across several addresses.

Cameron and Tyler Winklevoss

The legendary Winklevoss Twins – Cameron and Tyler – discovered Bitcoin while on vacation in Ibiza, shortly after their settlement with Mark Zuckerberg. A businessman from Brooklyn recognized them from the news and started talking to them about a new kind of money called Bitcoin.

The Twins became obsessed with Bitcoin and spent weeks trying to find reasons to not bet on the cryptocurrency. They couldn’t.

The Winklevii used their Facebook settlement money to purchase 120,000 bitcoins at less than $10 a coin. At the time, this purchase accounted for 1% of all Bitcoin in circulation.

Years later, they became the first well-known Bitcoin billionaires and started Gemini, one of the world’s most secure crypto exchanges.

Learn More: Read our Full Gemini Review

The United States Justice Department

That’s right, the U.S. government is a holder. It has amassed quite the bitcoin fortune by seizing illegally procured bitcoin from criminals.

Most of the bitcoin held by the US Justice Department came from shutting down Silk Road in 2013, an online forum used to distribute illegal narcotics.

The Bulgarian Government

The Bulgarian government owns at least 213,000 bitcoins, putting them in second place for countries with the most bitcoin. Bulgarian law enforcement authorities seized the amount from an international group of hackers committing cyber-crimes.

While the U.S. and Bulgarian governments hold enough bitcoin to be considered whales, they don’t behave like them from a trading perspective.

For example, the U.S. has auctioned off bitcoin in public auctions, and Bulgaria may choose to do the same. Our next whale was the beneficiary of one of these auctions.

Tim Draper

Tim Draper spent $18 million on 30,000 bitcoin at a government auction in 2014. The U.S. Marshals Service auctioned off the bitcoin it seized from the Silk Road marketplace, and he won the bidding.

Tim Draper is a famous venture capitalist today and one of the most prominent members in the Bitcoin community.

Roger Ver

Roger Ver is an early investor in bitcoin and other bitcoin-related startups like Bitcoin.com, Blockchain.com, and Kraken.

He has earned the nickname “Bitcoin Jesus” for spreading the word about Bitcoin and its ability to provide economic freedom.

Institutional Whales

Several institutions such as hedge funds and Bitcoin Investment Funds own a significant amount of bitcoin. However, this list is not exhaustive, and it appears that more institutions will join by the day in 2021.

  • Pantera Capital
  • Grayscale Investments
  • One River Asset Management
  • Ruffer LLP

One of Bitcoin’s bull cases revolves around “inevitable” institutional adoption. Only time will tell if it continues to be hedge funds or escalates to central banks and beyond.

Bitcoin Whale FAQs

How many Bitcoin whales are there?

As of mid-2020, 1,840 bitcoin whales held at least 1,000 coins.

Related: How Many Bitcoin Are There?

Do whales control Bitcoin?

Bitcoin’s network is decentralized, so no single person or entity controls it. However, some individuals own enough bitcoin to move the entire market when they buy and sell.

Related:What is Cryptocurrency?

How do whales manipulate Bitcoin?

Whales own enough bitcoin to move the market when they trade. Additionally, liquidity can be affected by such a small number of people owning so much Bitcoin. This can result in high levels of volatility.

Can you lose your money with Bitcoin?

Bitcoin is extremely volatile and has experienced pullbacks of more than 50% several times.

However, it refuses to die and has rebounded time and time again. Bitcoin has been called one of the best asymmetric trades of the last decade because of its potential upside.

Learn More:How to Invest in Cryptocurrencies

Who are the biggest bitcoin holders?

Some of the biggest bitcoin holders are the anonymous Satoshi Nakamoto, Tyler and Cameron Winklevoss, the U.S. Government, Roger Ver, Barry Silbert, and Michael Novogratz.

Bottom Line: Bitcoin Whales

So, a few people hold the majority of Bitcoin. But the same phenomenon exists with the U.S. dollar. This unequal distribution is not unique to Bitcoin, but it still poses potential concerns for market manipulation.

More Crypto Resources:

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and leading expert in investing and financial management. His work has been cited in leading industry publications, such as InvestorPlace and Business Insider. Sean is interested in the people and technologies that are improving the world.