A bear market is changing the landscape of the cryptocurrency market — while some investors are disappointed in the prospects of new assets, others are buying them at bargain price and increase in volumes of portfolios. Thus in a falling market, increased the share of «digital gold,» as evidenced by the index of dominance CoinMarketCap. Thus, the nascent industry is something like the period of primary accumulation of capital.
Influential market players, in common — «whales», periodically carry out large transactions. Because the cryptocurrency market is small and still not as liquid, solid, move the digital value to create significant volatility. Too sharp price fluctuations «stand in the footsteps» of marginalia and excite the imagination of supporters of the conspiracy. The latter is often told that technical analysis is useless reign in the market not supply and demand, and the manipulators and puppeteers, or that the bitcoin project of U.S. intelligence.
Journal ForkLog tried to find out how much the «whales» influence on the market and where you can view information about the biggest wallets.
How to know how much «digital gold» whales?
According to the service BitInfoCharts, the top ten most heavy bitcoin wallets looks like this:
Data as of 14.03.2019 G.
As you can see, the first six addresses identified. They belong to popular cryptomeria Bittrex, Bitfinex, Bitstamp, Huobi and the largest trading volumes Binance. On average, each of these addresses is stored for 100 000 BTC (over $400 million), or 0.54% to 0.72% of the total bitcoins in circulation.
The largest of the addresses belongs to the American marketplace Bittrex, which is in the top 50 by the daily trading volume.
With regard to the distribution of bitcoins, almost half of all available addresses balance does not exceed 0.001 BTC (i.e. $4):
Data: BitInfoCharts as 14.03.2019
Amounts from 0.001 to 0.01 BTC stored is about 22% of the addresses. At the same address with amounts in the range from 10 000 to 100 000 BTC in just 100. Only five addresses are stored from 100 thousand to 1 million bitcoins (in total 571 958 BTC or more than $2.2 billion). In addition to the five aforementioned wallets exchanges, the 100 most weighty addresses contain 12,7% of the total supply of bitcoins.
Delphi Digital analysts came to the conclusion that there are more than 22 million addresses. Only 20% of them kept more than $100, and the amount of more than 1 BTC have less than 700,000 addresses.
It is noteworthy that on the background of a falling market in the period from December 17, 2018 February 25, 2019, the aggregate balance of the five largest wallets rose 2 879 BTC. During the same period, the balances of other addresses included in the top 100, grew by 151 405 BTC.
The number of bitcoins from the third largest group (from 1000 BTC to 10,000 BTC) for these two months decreased by 135 449 BTC. With high probability these funds flowed it to the major players, given the increase in the balances of the latter two groups.
At the same service, you can watch and largest purses, the funds for which long time lie motionless:
For example, the major of them are 79 957 BTC received at this address in far 2011. If the owner of these funds lost access to the purse and suddenly decide to sell all the coins overnight at the centralized location like Binance, this can have a serious impact on the entire market.
According to BitInfoCharts, lying motionless more than 16 million BTC, that is a big part of bitcoins in circulation (17 588 112 BTC). It can be assumed that many such wallets access lost forever. In particular, this thesis confirms the study Chainalysis, which States that access to bitcoin in the amount of $20 billion lost forever. According to company representatives, the main reason for this is the loss of the private keys. Therefore, the actual amount of bitcoins in circulation will never reach 21 million BTC.
On the other hand, it is possible that a «dormant» addresses belong to large and patient «holleran», which cherish the hope that bitcoin price will ever grow to tens or hundreds of times. Such long-term investors are simply waiting in the wings to sell «digital belongings» at a very high price. Therefore, it is likely that the development of a new phase of the bull market many addresses «Wake up» and from time to time will happen the large sales. This situation is fraught with pressure on the price of bitcoin, but also in periods of sharp volatility.
It is possible that some of these «sleeping» addresses is cryptocurrency startup Xapo. According to some, in his specially equipped hopper can be about 7% of all existing bitcoins.
Photo: Joon Ian Wong/Quartz
Also a huge means of control of the company Barry Silbert Grayscale Investments. For example, according to Diar, the management of the Fund Grayscale Bitcoin Investment Trust at the end of last year there were more than 200 000 BTC, or about 1% of the total supply, the first cryptocurrency.
According to the September survey Diar, more than 55% of all bitcoins are in the wallet balance is over 200 BTC.
It is noteworthy that 1/3 of bitcoins from these wallets have never participated in outgoing transactions. According to the researchers, this may indicate the loss of the personal key or on a strong belief in the future prospects of cryptocurrency by its owners.
In addition, 42% of owners of these purses are not sold assets in the period of maximal values in December. While 27% continued since then to increase the number of bitcoins.
The Block analysts believe that the wallets of the exchange BitMEX is about 1% of all bitcoins. Also be aware that assets worth about $5 billion in control of the largest American cryptocurrency company Coinbase. In General, the balance largest trading platforms is at least 10% of the total supply, the first cryptocurrency.
The researchers also concluded that during the second half of last year has tended to decrease the bitcoin balances of some major trading platforms.
This trend may indicate a decline in speculative activity and the willingness of people to transfer assets to personal wallets.
In another study, Diar stated that in the past year in the wallets of Ethereum-the whales appeared more coins than in any other period in the history of the third by market capitalization crypto-currencies.
At the same time, analysts say, from January 2018, the number belonging to the whales Ethereum addresses has dropped by almost 30%.
Diar data show that by the end of November the large holders of Ethereum was 80% more coins than in January.
At the beginning of 2017 in the wallets of whales was only 5 million ETH, a year — 11 million, and by December 2018 — 20 million (20% of all outstanding coins). According to the researchers, the whales increased their stocks due to the fact that a significant number of traders left the market Ethereum tokens.
With regard to distribution analysts the company Digital Delphi found that more than 80% of all Ethereum coins are stored on the address 7542. Each of them amounts to more than 1000 ETH.
So, 6490 addresses stored from 1000 to 10 000 ETH ETH 923 — from 10 000 to 100 ETH 000 ETH, 155 — ETH from 100 000 to 1 000 000 ETH, and only four from 1 000 000 to 10 000 ETH 000 ETH.
It is noteworthy that the balance is more than half of Ethereum addresses does not exceed 0.001 ETH ($0.14). Over $1 is approximately only 25% of the addresses. With more than 80% of the addresses possess amounts exceeding 1000 ETH (> $143 000).
Thus, among the holders of the second capitalization of the cryptocurrencies is clearly dominated by «whales».
How do whales affect the market?
The owner of the fourth largest bitcoin wallet has recently relocated with his last 60 000 BTC ($240 million). Conclusion the amount of produced parts during the period 11:00 to 19:00 GMT on 28 February. The size of a transaction is most often $ 1,000 BTC.
It remains unclear the main motive of the owner of the wallet — maybe he decided to disperse their assets to avoid undue attention, or sold bitcoins in OTC markets. Whatever it was, but the actions of this large holder could have a significant impact on the market. This is particularly noticeable on the chart:
Hourly chart BTC/USD exchange Bitfinex from TradingView
As you can see, underpinned by a growth recovery rates of BTC in the specified period ends abruptly — there is a jump of the volatility, and then an unexpected and strong enough downward correction.
Consider the market impact of large transactions that December 5 was carried out by Coinbase. Then the largest cryptocurrency in the United States the company moved in the updated store customer funds in the amount of about $5 billion In particular, it was displaced 5% of available bitcoins of the company, 8% ether and 25% Litecoin.
As you can see in the chart below, that 5 December was not a particularly strong collapse of the rapid decline developed a day later. Apparently, this happened amid the panic, which with some delay sowed many media outlets and Twitter accounts.
Hourly chart BTC/USD from TradingView
Thus, even if a large cryptocurrency companies move assets between your accounts, it can still exert considerable pressure on price. The fact that addresses are «chubby» wallet and the associated transaction visible in blockchain. Information on any movement of funds with some delay pick up the social network and the media, creating in the medium of the unsuspecting captainvalor FUD (Fear, uncertainty and doubt — «Fear, uncertainty and doubt»). Fears traders are usually related to the fact that a huge amount can be sold on any major exchange, triggering a collapse of the market.
Because the cryptocurrency market is still small (about $140 billion), simultaneously selling or just transaction for tens of thousands of bitcoins has on it considerable pressure.
A significant reduction in volatility during bearish market phases can be explained by the growing number of large «hollero» who think rationally and prefer not to sell the digital currency at a loss. As the market recovery we can expect periods of sharp increase in volatility due to renewed activity of long-term investors. Actions of the latter can exert considerable pressure on the price of bitcoin as there are many «sleeping» wallets with huge reserves.
On the other hand, argued that a new bull market rally will attract institutional investors who make the market less volatile. In addition, initiated the «cholerae» periodic increase the supply of BTC can be actively absorbed these new players that will allow you to break long term upward trend.