The BTC Whales & HardForks
The BTC Whales & HardForks

By Juan Molina | Juan Molina | 14 Feb 2020

What are BTC whales?

They are a group of accounts or people who occupy such large positions in the Bitcoin market, that their purchase and sale orders can shake the market.

A mysterious group of about 1,600 investors collectively own $ 37.5 billion in bitcoin, about a third of the total available.

This fact that the BTC market is concentrated in this way contradicts the primary objective of the creation of the cryptocurrency: democratize finances through an alternative monetary system not controlled by central banks.

In addition, this concentration of wealth implies that there is a high risk of volatility in the market, since the operations of a small number of people have a great effect on the price. What could produce fictitious prices of BTC since there is a real possibility that these large investors communicate with each other, know each other and study the activity in the market, in order to manipulate it.

The network itself is secure.

Since the network hashrate has increased, this can be interpreted as a sign of the strengthening of the security infrastructure, further reinforcing the attractiveness of bitcoin, especially for long-term investors who may feel comfortable because of the fact that the Network is more secure than ever.


Whales and Forks

What happens during a fork?

When the Bitcoin Cash chain forked off the main chain, Bitcoin owners became owners of an equivalent amount of Bitcoin Cash. This is because the chains were identical until the fork occurred. If he owned 10 BTC before the division, then he owned 10 BTC and 10 BCH after the division.

When the BTC split, part of the value that was in the network was moved to the branched chain. When Bitcoin Cash forked from the Bitcoin network, the value of Bitcoin went from $ 2800 to $ 2700 (July 23, 2017).

There are extremely skilled investors who have taken advantage of the BTC branches to make masterful plays and win millions. Buying a large amount of Bitcoin, anticipating a division of the chain where you have several new altcoins equivalent to the amount of Bitcoin you own, quickly selling the altcoin for profit and then decreasing your position in Bitcoin because it is overvalued.

Example with Figures:

Suppose Juan owns 1000 BTC.

When Bitcoin fell from $ 2,800 to $ 2,700, Juan's digital assets fell from $ 2,800,000 to $ 2,700,000, a loss of $ 100,000.

However, due to the fork, Juan now has 1000 BCH worth $ 555 per piece. Now Juan can sell his BCH for profit at the moment when the option to sell BCH is available to him in his preferred exchange.

Juan sells 1000 of his BCH with a profit of $ 555,000. A good profit to compensate for the loss of $ 100,000 he suffered due to the decrease in the price of Bitcoin.


Since only a few large players are needed to implement a strategy like the one proposed, it is possible to raise or lower the value of Bitcoin. So when an opportunity like this presents itself (a hardfork), the price of Bitcoin may not reflect the true value of Bitcoin.

When these people decrease their position in Bitcoin to an amount that they feel comfortable during a bear period (and that number may be zero) their collective offers are able to create a sales wall that reduces the price of Bitcoin.

After the big sale of altcoin and Bitcoin, investors capitalize on the low price of Bitcoin from the massive sales wall and buy back the Bitcoin they downloaded earlier.

In addition to the profits that investors get from the sale of all their altcoins, investors will experience capital gains by selling their Bitcoin at an artificially high price and then buying Bitcoin again once the price is lower.



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Juan Molina
Juan Molina

I'm passionate about everything related to Crypto and Blockchain

Juan Molina
Juan Molina

I'm passionate about everything related to Crypto and Blockchain

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