Why Do Crypto Whales Matter & How Do Whales Manipulate Crypto?

The value of crypto coins is determined by and large through supply and demand. Meaning, if a large portion of the supply of a particular coin is held out of circulation, this drives up the price of the coins left in circulation. It follows that if a large number of coins are suddenly liquidated, the value of those coins will drop. Because of this, whales have the unique ability to essentially manipulate the crypto market for their benefit.

For instance, what if a whale wishes to acquire more coins for a cheaper price? All they need to do is start selling an impactful portion of their assets. This causes downward pressure on the market and is likely to generate a fire sale increasing liquidity for the coin at a lower price. They can then simply buy back their coins and more at cheaper prices.

They can then hold on to these coins and reduce the supply. Prices tend to rise and increase the value of the coins they have just purchased. This is a very simplistic take on how whales can affect the market, but it demonstrates the power that they wield.