Crypto Whale Activity Reveals Institutional Investors Are Stocking Up on Bitcoin

October 10, 2023

Investment

Maria Carola

The crypto ocean is home to a variety of species, each one with its own unique purpose and strategy. At the top of the crypto food chain are the crypto whales, holding massive amounts of Bitcoin, typically 1,000 BTC or more. There are also even larger whales, known as humpback whales, who hold over 10K BTC.  Furthermore, there are smaller actors such as shrimps, crabs, fish, and sharks, each possessing their own levels of BTC. So let’s dive into the depths of the crypto sea and uncover the money trails of its inhabitants. Who knows, maybe we’ll come across a few whales willing to share their secrets!

Regular Whales and Humpback Whales

Crypto whales can cause tidal waves in the crypto market with their massive assets. Also called strong hands, they have the potential to influence the entire market with their trades. Therefore, it’s important to understand their behavior in order to catch this market-shifting wave.

The term humpback whale refers to addresses that have more than 10,000 BTC. All major exchanges fall into this group, including Coinbase, Binance, Kraken, and really big whales as well.

A rise in BTC held by this category usually means users are transferring their Bitcoins to exchanges for sale, which is usually a bearish sign. Likewise, a decline in Bitcoin held by this category generally indicates bullish sentiment. 

Bgeometrics data shows changes in BTC distribution among different cohorts over the past two years. Over the period September 2021–September 2023, humpback whale ownership of total Bitcoin supply fell from 15% to 13.9%, while regular whale ownership increased from 24% to 28.3%.

Source: Bgeometrics

As of this writing, the humpback whale cohort’s BTC holdings have fallen by 15,196 BTC over the past month and by 6,244 BTC over the past three months, according to Bgeometrics.

Source: Bgeometrics.com

Below is a chart showing recent spikes in exchange outflows to support this trend.

Source: Coinglass.com

This could suggest that investors are moving BTC from exchanges to cold storage, indicating they expect a bullish market in the near future.

Bgeometrics data also shows that holdings of regular whales in the 1K-10K BTC category, the real whales we’re interested in, decreased by 9,812 BTC over the past month, but rose by 16,395 BTC over the last three months. Despite last month’s selling, the general trend points towards accumulation, indicating long-term confidence in Bitcoin.

Sharks 

Sharks are addresses that own between 100 and 1,000 BTC. They are other key players to watch in the market, since they tend to understand the market well. According to Bgeometrics, sharks have increased their BTC holdings by 11,729 BTC in the past month, despite a decrease of 22,360 BTC over the past three months. It is possible that these savvy investors are also expecting potential bullishness coming up.

Source: Bgeometrics.com

Fundamentally, we are seeing some positive developments too. A recent court ruling found that the SEC’s rejection of Grayscale’s Bitcoin ETF application was “arbitrary and capricious”. Other major asset managers such as BlackRock, ARK 21Shares, Bitwise, VanEck, Wisdomtree, Investco Galaxy, Wise Origin, and Valkyrie have also refiled applications to the SEC. Increasing prospects for spot Bitcoin ETF approval may lead to an influx of funds flowing into Bitcoin, creating a bullish market. As a result, knowledgeable investors may be stockpiling Bitcoin in anticipation of the potential upswing.

Conclusion 

Despite the current weak price action, a trend of accumulation among major players suggests that institutional investors are showing a sign of optimism. From savvy sharks to the all-powerful whales, the smart money appears to be gearing up for a bull market.

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This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.

Originally published at CRYPTOWISSER.