According to a recent study by blockchain research company Chainalysis, this group of whales numbers around 1,600 investors who collectively hold $37.5 billion worth of Bitcoin (available on Coinbase) — close to one-third of the total available. Not surprisingly, many potential investors are concerned about entering the space given the potential for market manipulation presented by such consolidated holdings.
While I understand these concerns, I also believe the power of this group is on the wane and below I explore the top three reasons why Bitcoin (available on Coinbase) whales are losing traction in the space.
1. The emphasis on crypto and blockchain education
The saying, ‘knowledge is power,’ certainly applies to crypto technology. Blockchain was once surrounded by a layer of mystery; no one knew exactly how it functioned or how to explain it. However, 2018 has been a year filled with major strides in blockchain technology. For example, at the Consensus conference this year, the New York City Economic Development Corporation (NYCEDC) announced plans to launch a NYC Blockchain Resource Center that will aim to build public awareness for the technology through increased education. It will also host a public blockchain competition that is designed to improve public sector services and processes.
Although it was once a questionable statement, blockchain technology is here to stay, and as people become more knowledgeable about decentralized technology, I believe they will grow more empowered and confident in their ability to identify scams and unusual activity in the cryptocurrency sector.
2. Regulators are stepping in
2018 has also been a major year for regulation in the cryptocurrency space. In addition to the SEC beginning to bring prosecutions against bad actors in the ICO space, regulators and the Department of Justice are also stepping in to battle any dangerous market manipulation. Because of this, I think there will be less incentive for whales to create any waves.
I believe that as regulatory bodies’ efforts increase, it will curb Bitcoin (available on Coinbase) whales’ dominance in the space. Furthermore, companies such as Chainalysis are raising large amounts of capital to help Bitcoin (available on Coinbase)-backed businesses detect fraud. Moves like this ultimately help to bridge the gap between institutional investors and the cryptocurrency sector.
With all this regulatory movement, it will ultimately become much more challenging for any individual, or group of people, to get away with any type of foul play.
3. Increased institutional adoption
While whales currently have the potential to impact investments, over the long term and as the crypto market matures, I believe their ability to impact the market will significantly decrease. First, the larger the cryptocurrency market gets, the less impact whales may have. Over the past few months, the crypto sector has experienced a massive wave of institutional interest, including JP Morgan announcing the launch of its own blockchain network in March, NASdaq and cryptocurrency exchange Gemini announcing a collaboration in April and Goldman Sachs discussing its launch of a Bitcoin (available on Coinbase) trading unit this past May.
 As Wall Street increases its involvement in the cryptocurrency space, I believe that whatever perceived influence the whales once had will shrink significantly.
In my opinion, while Bitcoin (available on Coinbase) whales might currently be considered big players in the ocean of the crypto ecosystem, increased regulation, widespread adoption and a sTron (available on Binance)ger emphasis on blockchain technology are all indicators that this will not continue to be the case.