- Bitcoin whales are entering the market and hoarding thousands of Bitcoins
- With a Bitcoin halving event in 2020, the price of the digital currency is expected to increase
A few days ago, we wrote a Bitcoin Exchange Guide that Diar released a report in which they show that large Bitcoin (BTC) wallets have gathered 450,000 BTC since December 2018, when Bitcoin reached a bottom in the market. Whales realized it was the best moment to purchase Bitcoin and store it waiting for a new bull market.
Are Whales Good or Bad For Bitcoin?
As Bitcoin whales entered the market in December 2018, the digital asset started growing and expanding in the market after a year-long bear trend. At the moment, these holders want to “exploit” the law of supply and demand. Thus, they want to gather as many coins as possible drying liquidity up. This could translate into higher Bitcoin prices in the future.
This technique to hoard an asset has been used by several companies, such as DeBeers, in order to drive prices higher. DeBeer is a UK-based diamond company that controlled the prices of the diamond market for around 100 years. At the same time, they also controlled 85 percent of the market.
In general, such kind of activity in the market is common in markets that have a limited supply. According to CCN, the New York City taxi medallion industry fell from $1 million to $150,000 when hedge funds decided to enter the market. Nonetheless, Bitcoin does not generate income such as taxi licenses.
Thus, the crypto market must follow very closely what these whales do and how they operate in this volatile market. Bitcoin is moving upwards and there are several analysts that believe that Bitcoin could reach new highs in the near future. At the time of writing, Bitcoin is being traded around $8664 and it has a market capitalization of over $153 billion, according to CoinMarketCap.
With a price halving event as the one that Bitcoin is going to be experiencing in May 2020, the effect large whales took to store Bitcoin will have even a more pronounced effect on Bitcoin’s price. Next year, Bitcoin miners will receive 6.25 BTC per block as a reward rather than 12.5 BTC as they do receive now.