The term whale is another slang term often used. It refers to investors that hold enough funds that they are able to manipulate a market through their trades.

You can think of the ocean. Most of us are like little fish in the sea. Most fish are small, but there are also the bigger fish. Then, you’ve got the whales… the biggest fish in the sea. In trading terms, it is the same kind of thing. Most buyers and sellers are smalltime. You’ve got some who have more funds in the market than others. But, then you’ve got some whales.

Whales have very large crypto holdings in relation to the overall size of the market. In other words, they own large chunks of the overall market. Enough so that they have the ability to sway the entire market price up or down merely by executing large trades.

Whales have the ability to manipulate the market. For instance, they could sell a large chunk of their holdings in order to start a market sell-off. Most of the time, this freaks out the smaller fish and they start, in turn, selling their own holdings. This causes a market dump…. thereby giving the whale the option to swoop back in, buy back their crypto at a discount as well as scoop up the coins that were just sold by the smaller investors. On the flip side, a whale could manipulate the market upward by executing a large buy. That large buy raises the overall market price, therefore drawing in smaller investors (often through FOMO). This raises the price and therefore the value of the whale’s holdings.

The concept of the whale in crypto is common in these early days. As the market cap increases and the number of traders increases, the effect of whales decreases. But, whales are just a fact of nature. Some people own enough crypto to impact the overall market. It is just like nature itself, really.