Some old investing wisdom is to follow what the pros, or smart money, are doing. It’s one reason myriad market participants worship at the altar of Warren Buffett. It’s also why 13F filings are so widely followed. Though not foolproof or guaranteed to work 100% of the time, the advice is pertinent in the world of equities. It may also be applicable to bitcoin and ETFs like the CoinShares Valkyrie Bitcoin Fund (BRRR ).
As experienced cryptocurrency investors know, “whale” activity in the space has long been tracked, And, in some instances, can be a valuable tool in forecasting short-term moves.
The whale colloquialism refers to sizable owners that can affect prices by adding to or trimming positions. For investors considering bitcoin or ETFs like BRRR, it’s worth noting whales figure prominently in the equation. That’s long been the case and remains true today.
Whales Dominate Bitcoin Market
Regarding the currency, it can be argued the population of whales recently increased with more institutional players. That includes ETF sponsors entering the market. Santiment, a firm that tracks bitcoin whale activity, confirms the extent to which bitcoin is an asset that’s largely controlled by big investors.
The research firm notes that ,as of May 13, wallets holding at least 10 of the cryptocurrency control 82% of mined supply. Conversely, just 17.5% of the bitcoin that has been mined to date is held by wallets that own less than $1 million of the cryptocurrency.
It’s likely ETF issuers are part of the bitcoin whale group, given the rapid adoption of products like BRRR. Santiment data indicates there’s a decent-sized group of “small institutional investors” that own 10 to 100 bitcoin . Those in the 100+ group are likely large institutions.
These digital crypto buyers with deep pockets are relevant for another reason. They can gobble up supply of an asset that has limited supply. That means a significant portion that is unlikely to ever come to market.
“Santiment estimates that between 3 million and 4 million Bitcoin ‘could be gone for good’ due to lost private keys or inaccessible wallets, while around 1.14 million coins still remain to be mined until the year 2140,” reported Denis Omelchenko for Crypto News.
Santiment points out another reason smaller investors and those using ETFs like BRRR should pay attention to bitcoin whales. Those investors tend to be buyers when bitcoin prices slide, gobbling up the supply sent to exchanges by smaller retail market participants.
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