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A study by the crypto forensics firm Chainalysis published on October 10, 2018, examined the 32 biggest whales, who together hold a little more than 1 million of the approximately 17 million bitcoins mined to date, and found that their impact on the market might be immensely overrated.

New Data Shows That Bitcoin’s Largest Holders May Not Be the Ones Destabilizing the Market

Bitcoin whales, individuals who own large hoards of the digital currency, have been the source of speculation and anxiety in the industry since bitcoin’s 15 percent drop in August. However, new research from Chainalysis has provided more information on the identity of the whales and their impact on the market, and it’s not as bleak as everyone paints it to be.

A study published on October 10, 2018, by the crypto forensics firm examined the 32 biggest whales, who together hold a little more than 1 million of the approximately 17 million Bitcoins mined to date, and found fears about a whale-fueled to be overblown.

The company’s data showed that Bitcoin whales are a diverse group and that only about a third of them are active traders. And while Chainalysis doesn’t deny the whales’ capability of executing transactions large enough to move the market, their data has shown that they have, on the net, continually traded against the herd, buying on price declines.

According to the study, the largest holders of bitcoin appear in aggregate, to have stabilized the market during recent price declines, rather than exacerbating price movements as many small-time investors have feared. All of the data suggests that whales who engage in trade are professionals with no vested interest in abruptly tanking the market.

When these whales do require liquidity, they are more likely to use OTC trading platforms that are equipped to manage large transactions to reduce the impact they have on the market.

Breaking down the Structure of the Whales

 

Chainalysis chart showing four different whale categories

(Source: Chainalysis)

Chainalysis has classified the 32 whales into four categories: traders, miners, criminals and lost whales. Three of those fall under the “criminal whales” category, and are thought to have made their fortune years ago when Bitcoin was best known as a currency to conduct illegal transactions on the Internet.

The nine whales in the “trader” category have all entered the market in 2017, according to the study, and have been actively buying and selling since then. With nine wallets controlling over 332,000 coins, worth just over $2 billion, they make up the largest category, but only about a third of total whale holdings. Chainalysis economist Kim Grauer told Fortune that contrary to popular perception, the trader whales have typically been buyers not sellers when Bitcoin’s price dips and there is no evidence of them acting in concert.

Miners are the second largest group of whales and consist of 15 individuals who amassed large quantities of Bitcoin at a time when it was easy and inexpensive to mine. According to Chainalysis, there are currently five “lost” whales, individuals who amassed large quantities of Bitcoin in the early days but, but based on a total lack of wallet activity, have likely died or lost the key to their wallets.