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What does the concentration of bitcoin holdings mean for retail investors?

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cryptomarketupdate
What does the concentration of bitcoin holdings mean for retail investors?

Bitcoin's increasing popularity hasn't impacted any of its fundamental attributes in the past years. Its ownership still remains concentrated in just a few hands.

A recent report states that "2% of accounts hold 95% of the total Bitcoin supply." A similar report reveals the distribution of BTC among addresses. Others have reported similar statistics indicating a massive concentration of wealth in the Bitcoin network.

So, what does that mean to a retail investor? To understand this we will first understand how whales manipulate the crypto market and later we will discuss what happens to retail investors when the control shifts from the investors to the whales.


How Whales Manipulate The Crypto Market ?

Whales are entities—individuals, institutions, and exchanges—that own large cryptocurrency tokens. In the past few years, crypto whales are becoming increasingly common in the cryptocurrency industry, particularly when it comes to Bitcoin.

As whales hold significant amount of crypto tokens, they have the power to manipulate the market. Whales primarily control cryptocurrency using two methods:

They create a “sell wall” effect

Sometimes, a whale places a large order to sell a huge proportion of their crypto tokens. They maintain a lower price than other sell orders. This creates volatility, which leads to a general decrease in the prices of crypto assets.


They create a “sell wall” effect

Sometimes, a whale places a large order to sell a huge proportion of their crypto tokens. They maintain a lower price than other sell orders. This creates volatility, which leads to a general decrease in the prices of crypto assets.


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