With the recent discussions surrounding the Doge Whale - this being the person, corporation or institution behind Dogecoin account DH5yaieqoZN36fDVciNyRueRGvGLR3mr7L - many are seemingly scared of the huge amount of Dogecoin currently held by this as well as other accounts holding huge amounts of Dogecoin. This scare is, of course, very logical. There is a real risk that this account could, in theory, devalue Dogecoin to such a large extent that it might ruin the market. Very logical - it’s how the market works. However, it can be argued that this risk might not be what people - such as Elon Musk, who infamously tweeted that he would pay this whale in-cash to void his account - make it out to be.
Imagine being the owner of this account. Yes, you theoretically own 55.3 billion worth of Dogecoin, and in theory, you could put everything up for sale, completely devalue the market, and earn a good buck. However, considering you have even the slightest of a basic understanding on how markets work, you won’t be able to sell this share for 55.3 billion; if you even sell a decently sized part of this huge amount, the price will drop significantly. Sell a tiny part more, and the price will drop even more significantly.In essence, you’re devaluing the currency you hold a giant position in.
This devaluing will only be spurred on considering the attention already set on your account. If people see such a large sale of Doge happening, and know you hold this large an amount in your account, it is logical they will start selling their Dogecoin position at a price below the one you’re selling at; they know it is going to devalue so they must sell quick. And considering the volatility of crypto prices; you’ll be left with very little of that 55 billion if you don’t sell at unreasonably high speeds, let alone even find a buyer after going through even a small amount of this money. So you hold. Sell tiny amounts, which will only influence the market very slightly, and hold further. Or you could take Elon’s bid of course.
The point is that, whilst this account could theoretically devalue Doge, it would be completely illogical to do so. Instead, like the owners of the London warehouse filled with gem-quality diamonds, the famous artist who secretly stores some of his best works in a safety deposit box, or your government refraining from printing away your purchasing power, you hold it - Sure, nobody is for certain that this account won’t turn Dogecoin into a blatant pump and dump scheme. And sure, the price will be kept high artificially. But at this point, the smartest thing for this whale, and for that matter most Dogecoin whales, is to do nothing but hold.
