- Bitcoin has a clear problem with it’s whale population
- Some believe that a whale extinction needs to occur to fix the markets
- Can the whales actually be stopped?
Before we begin, let’s first remind ourselves of exactly what a Bitcoin whale is. According to Investopedia:
“A bitcoin whale is term in the cryptocurrency world used to refer to individuals or entities that hold large amounts of bitcoin. From the point of view of blockchain and its core decentralized feature, bitcoin whales cause concern, as the situation could lead to a small number of people having controlling power over the cryptocurrency. Bitcoin whales could also have a disproportionate impact on prices, fueling speculation that some of BTC's recent wild price swings were due to price manipulation by the whales.”
The premise is that a whale holds such a large amount of Bitcoin, their movements and transactions can cause issues within the markets as a result of manipulation. This could be tactical too which means in theory, whales can work together to crash the markets for their own personal gain.
So, how do we get rid of them? We aren’t going to advocate actually killing off whales, that would be horrendous, however the market could benefit from seeing a sort of whale extinction. In order to see an extinction, what we need to do is ensure that the supply of Bitcoin continues to spread and grow. The only way to do this is to allow more people to start investing in Bitcoin. Now, to do this we need to get the price up to encourage the whales to sell off. When this happens, prices fall and suddenly it all seems pretty pointless, doesn’t it?
However, during those prices falls and market downtimes, Bitcoin becomes more available and thus over time, more people start to buy in and the spread of Bitcoin eventually expands allowing the currency to become more evenly distributed. It’s a very simple theory, but in practice it makes sense doesn’t it? As Bitcoin becomes more popular, tokens will be better distributed and will be more decentralised meaning that in the long run, the whale influence should eventually die off.
A whale extinction could be great for the markets. Yes, we’re a while off yet, but over time this could become a far more realistic prospect, one that will benefit the entire industry in the future.