Whale is a term attributed to individuals within the cryptocurrency community, who have very high net worth in powerful cryptocurrencies. This power allows them to sway the market in whichever direction is most suitable for them.
The first recorded incident of a “whale” manipulating the price of a cryptocurrency occurred on October 14th, 2014. At this point in time, bitcoin was hovering at a value of around $320. An individual decided to sell 30,000 bitcoins for $300 per bitcoin. Exchanges had to be able to match this valuation and as a result of this, bitcoin’s price started to fall, which created a pattern of price changes within bitcoin.
Numerous internet memes were created around this event and the whale was eventually given the nickname BearWhale.
The actions of BearWhale caused a lot of confusion and turmoil in the cryptocurrency market.
After this event, other whales have emerged in cryptocurrency platforms, especially younger platforms. Their intentions are strategic in comparison to BearWhale, who reportedly sold their bitcoins for ideological reasons, rather than financial reasons. They are individuals, who similarly to BearWhale, have a large amount of wealth within their respective cryptocurrency. They then used their ability to manipulate the market into periodic, strategic lows. They did this so that they could purchase a large number of coins at the reduced prices and then profit from mass selling again when the market recovered.
These actions can be very frustrating for the other users of the cryptocurrency that has been targeted by the whale.