Sometimes the markets move for mysterious reasons. Other times, there is a trigger behind every market movement. The recent actions by whales have caused ripples in the crypto market. For the experienced crypto investors, the activities of large accounts and whales have become essential indicators of future crypto price action.
A whale alert announced that a series of large transactions preceded the crypto market surge that happened in April. The surge saw the general market capitalization grow by around 30% from $140 billion to $180 billion. Reuters reported on April 2 that over 6 million trades occurred within the hour that witnessed the price surge.
Most of the activity that resulted in the April surge was concentrated on the Asian exchanges. That represents three to four times higher than the normal trading volume and it seems like the whales were somehow responsible for ending the persistent crypto winter. Their movements made the market surge considerably.
A Bloomberg analysis shows that the actions of whales caused ripples that revised other crypto holders who were dormant throughout 2018. Around 10% of bitcoin wallets were inactive while the average for other months ranged between 30% and 40%. It is worth noting that all the top-10 crypto wallets were active in the month of April.
The Movers and Shakers
The largest transaction came at the end of April where one transaction involved a transfer of $1 million. A little research into the transaction discovered that the recipient was Roobee, a blockchain-based investment service. That particular investment seems connected to the completion of the first session of their private funding round.
Recent press reports reveal that the startup is now preparing for an IEO to be hosted on several Asian exchanges. The whale included “In Roobee I trust” into the transaction details. Moreover, at one point they appeared to have had around 7,000 BTC on their balance. However, the possibility of that owner having many wallets cannot be ruled out.
Lack of demand for ICOs and negative trends in the crypto market all through 2018 and Q1 of 2019 changed abruptly at the start of April. Data shows that whales largely favor investing in IEOs. Artem Popov, Roobee’s co-founder stated that these investments show that investors are turning to IEOs.
The startup aims to offer retail clients similar investment opportunities and high-security levels to those enjoyed by the whales. However, retail investors can invest as low as $10 and still experience the conditions enjoyed by the whales. Even though Bitcoin is yet to rise past its 2017 all-time highs, the ability of crypto startups to float token sales on exchanges enable then to avoid regulatory hurdles from governance bodies like the SEC.
The Rise of IEOs
IEOs let cryptocurrency startups avoid the difficult task of getting an exchange to list their cryptos many months after conducting an ICO. Currently, over 50 projects have already hosted an IEO. An extra perk of the fundraising method is that the participating projects must go through an exhaustive procedure of authentication.
Thus, investors can rely on higher levels of security when compared to the ICO method popular in 2017. The plunge in ICOs and the surge of IEOs shows that investors have an interest in sector growth that values regulation. Also, investors want high-quality infrastructure and investor security that enable new people to enter the market easily.
The impact of whales on the crypto market currently is quite strong. Though most whales prefer anonymity, a few come forward occasionally to share their thoughts about the general status of the crypto market. For instance, one whale said in February that the crypto market would recover sooner than most investors anticipated.
The recent $1 million Bitcoin transfer whale compared the crypto market to the stock market. The nascent crypto market will soon see large investment funds from the entrance of institutional investors. Regulation and legalization will spread through the industry, in turn, increasing the number of real blockchain implementations.
The whale thinks that large business and active financial development will play a major role in the growth of the crypto sector. Moreover, the love for digital products by generation Z and their reluctance to be tightly controlled create excellent conditions for powerful developments in the crypto markets. Combining all these conditions may propel bitcoin to $50,000 in the next 3-5 years.