Crypto whales: Market manipulators or innovation drivers?

“Cryptocurrency whales” are influential players in the cryptoasset markets due to their ability to own and transact large volumes of cryptocurrencies. These large investors can exert considerable influence on the prices of digital assets, especially in those markets with less liquidity. 

Their presence and activities are a key factor in the dynamics of the cryptocurrency market, and their behavior can have both positive and negative effects on the perception and value of digital assets.

In the field of market manipulation, the strategies employed by whales can vary, but some of the best known include "pump and dump", where the price of an asset is artificially inflated and then sold at a higher price; the spread of FUD (fear, uncertainty and doubt) to influence market perception and cause price movements; manipulating orders to create a false impression of demand or supply; and the use of inside information to obtain market advantages before certain events or announcements are made public. The impact of whales is particularly notable in the memecoin market, which typically has lower liquidity and is more susceptible to manipulation. In the case of Bitcoin, although it is less prone to manipulation due to its greater liquidity and adoption, whales can still influence its price through large transactions or market strategies.

It is important for investors and regulators to be aware of these practices and consider them when making investment decisions or developing policies to ensure the integrity and stability of the cryptocurrency market. Transparency, education, and proper regulation can help mitigate the negative effects of market manipulation and promote a fairer and more equitable investment environment for all.