Who Are the Bitcoin Whales? (Criminals, Traders and Early-Adopters)

Bitcoin whale is the term given to those with huge amounts of bitcoin. And if they were to suddenly sell all their coins at once, it would cause an enormous splash on the markets.

It’s estimated that only 1,000 “whales” own about 40% of all bitcoin.

To put it another way, 61% of all bitcoin is owned by just 0.07% of wallets.

But who exactly are these crypto millionaires with gigantic bitcoin wallets?

A few names spring to mind:

Satoshi Nakamoto Bitcoin’s mysterious founder is estimated to own one million bitcoins. He mined them in the early days and has never moved them since.

The Winklevoss Twins – The arch nemeses of Mark Zuckerberg, the Winklevi poured much of their Facebook legal settlement into bitcoin. They’re estimated to own 1% total bitcoin supply. 

There are others too. Early adopter Charlie Shrem, for example. Then there’s billionaire Tim Draper and Barry Silbert, both of whom bought bitcoin in a 2014 auction.

However, a recent Chainalysis report dug deeper into bitcoin whale activity. Analyzing the 32 biggest bitcoin wallets, here’s what they discovered:

chanalysis bitcoin whales
Credit: Chainalysis

A Third Are Active Traders

Nine of the 32 largest whales were actively buying and selling in the last year or so. They could be individuals or institutional crypto hedge funds.

As for their activity, these holders were generally “buying the dips.” In other words, they were waiting for bitcoin to decline before buying more.

As Chainalysis explained: “they have, on net, traded against the herd, buying on price declines.” So, despite media claims, bitcoin whales aren’t necessarily the ones crashing the price. Instead, bitcoin whales are stabilizing the market, buying at the low points to prop up the price.

Chainalysis also estimated that most of these active whales splashed into the market in 2017 so they are relative newcomers.

Early-Adopters 

Chainalysis uncovered a handful of wallets dating back to the early days of bitcoin. These are early-adopters and miners that amassed a large wallet when bitcoin was in its infancy.

Trading activity is “extremely low” among this group, however, a fair number appeared to “cash out” during the bull runs of 2016 and 2017, making a fortune in the process. 

Criminals

Of the 32 largest bitcoin wallets, three have been linked to criminal activity. Those three wallets contain 125,000 coins, worth $800,000,000 at today’s prices.

Two of the wallets are linked to the infamous Silk Road black marketplace, where users could buy drugs and weapons with bitcoin. Chainalysis concludes that the third wallet was involved in money laundering.

Further reading: Black Markets, Fraud, and Money Laundering: How Much Is Bitcoin Used For Crime?

Lost Wallets

The remaining largest wallets have lain dormant since 2011. We assume the private keys to these wallets are lost for good which means these whales no longer have access to their vast fortune.

These lost wallets contain 212,000 bitcoins, or approximately $1.35 billion worth of bitcoin.

It’s estimated that a total of four million bitcoins have been lost over the years.

Learned something new in this article? Subscribe to the Block Explorer newsletter.

Ben Brown

Editor, Block Explorer News. Reach me at benjamin-brown.uk

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.