In 2017 Bitcoin managed to reach a $20,000 valuation per coin and it was almost all retail investors fomo that brought the price of BTC to all time high, and what a spectacular one it had. Very few investment funds and large financial institutions have probably added to the volume and demand for BTC and probably them(aka whales) have profited the most.
They're the smart money, who always buy low and sell high, and in order to do that the right way, you have to load your bags quite early and start dumping when every bozo thinks he'll gonna own a lambo in a few months, and is talking extatically about bitcoin left and right. There's always a peak and a slope at the end of the peak and those smart money usually abandon the train before falling of the cliff and they also onboard on the journey's quite early stages.
According to glassnode, "the number of Bitcoin whales (entities holding at least 1,000 $BTC) has reached a new ATH after more than 4 years." Which means what...? You guessed it, whales(aka smart money) are accumulating BTC like there's no tomorrow and setting themselves in the position for large revenues over the year, or maybe years, to come. I know BTC is spicy at $19,000 for most of us, but for PayPal is not...
What's a whale actually in glassnode's terms?
"The number of unique entities holding at least 1k coins.Entities are defined as a cluster of addresses that are controlled by the same network entity and are estimated through advanced heuristics and Glassnode's proprietary clustering algorithms. Note that entity–based metrics are based on data science techniques and statistical information that changes over time and are therefore mutable – the data is stable, but most recent data points are subject to slight fluctuations as time progresses."
Now why is this relevant for the average Joe reading this post, if he actually does that instead of browsing facebook, it's quite simple to comprehend. Last time when the ATH of whales holding more than 1,000 BTC each occurred, was in mid 2016, quite soon after the BTC halving took place and if you look carefully at the chart above you'll notice that when the price approached its ATH, these entities decided to gradually dump. Not all of them did that of course, but the trend is clear: buy low, sell high
Do the opposite and you'll loose a lot of money and you'll also get grey hair prematurely, if you haven't got it already. To further support the theory that the current bull run that we are witnessing for BTC is lead by these entities that each hold over 1000 BTC and presumably are not dumb money, I'll show you what dumb money are doing meanwhile, through a screenshot of the google trends bitcoin search term .
Look at how low it's currently positioned from its previous ATH, and if you don't believe this thing is correlated with the price action of BTC, by my guest and do your own research. Comparing the two, the glassnode chart for whales (entities holding at least 1,000 $BTC) and the bitcoin google trends search term it is obvious that whales(aka smart money) and retail investors(aka dumb money) are using totally opposite strategies for investing in Bitcoin and my gut feeling tells me that whales have done their homework better than retail investors. They don't get late to the party.
The accumulation process is still rolling, in the anticipation of future massive gains, by dumping their holdings to FOMOing plebs and noobs, pretty much like some of us intend to do as well, but are these whales really going to dump all their bags in exchange of fiat, and bet on a future bear market like the one which followed the 2017 bull market? Probably not... and let me show you why.
Paper money printing is on a brrr mode in the middle of a digital revolution while BTC is seeing its circulating supply getting closer and closer to the total 21 million BTC that will ever exist. Now, the question is: will there be enough BTC for all the millionaires in the world? Probably not, and when you are already a millionaire or billionaire, understanding the fundamentals of the current financial system and the ones of BTC, blockchain technology and cryptocurrency, it definitely makes sense to hedge your fortune into BTC.
Fiat money is slowly becoming a fossil and there's no turning back. No matter how much governments and central banks are going to print, it will never be enough leading to more inflation, debt and a weaker purchasing power for the good old dollar and probably most of the currencies out there. Hence we get to see more and more millionaires investing large chunks of their fortunes in BTC and you've probably noticed that they're willing to accumulate at almost any price.
What difference will it make in a few years from now for someone that bought BTC at $19,000 or $30,000? Almost none at all... due to the deflationary nature of BTC and it's proved increasing value over time, and the insane inflation that eats the dollar alive. Having a look at this equation, getting into BTC and crypto makes a lot of sense and it's no wonder why whales (entities holding at least 1,000 $BTC) are living the digital gold rush before it's too late, and for plebs it will be too late quite sooner than later.
You've probably heard by now the good old narrative: while the rich are getting richer, the poor are getting poorer and if you can't see its meaning in the current economy, have a look at this...
The dollar is dying, the euro will for sure follow and if you still feel like saving money is better than investing in crypto, go live in Venezuela for a few years and tell me how you're savings are doing. Very few are taking into consideration the mess in which the world's economy has gotten into and even fewer are seeing the reasoning behind those large whales eating all that much Bitcoin they can lately. These are not the average Joes and in my opinion most of them won't sell everything even when BTC will reach $250,000 or $500,000. It's because buying back won't be such a bargain anymore.
Now, I took BTC as the reference term for this short crypto has value episode because it's the epitome of crypto, but there are definitely many more other blockchain projects and cryptocurrencies that will increase in value and will help change the world, not exactly as probably Carlos Matos dreamed of, but it's clear this is not just BTC's game here. For whoever is reading this, that has crypto in his/her portfolio and also the means to earn it, don't sell it cheap, and don't sell it all. Times will come when the same amount sold for a few grands will be worth way much more and way harder to harness.
Thanks for attention,
Initially Posted Using LeoFinance Beta