DEFINITION of Bearwhale
Bearwhale is the trader with a fat account who is bearish on the price of a cryptocurrency.
WHAT IT IS IN ESSENCE
A BearWhale is a dangerous being because such a trader tries to sell large quantities of bitcoin on the open market, lowering the price for everyone else. Bitcoin enthusiasts love a good conspiracy theory.
Everything happened in 2014 when the blockchain showed that a single Bitcoin collector was trying to sell 30,000 Bitcoin all at once at a price of $300 per coin. Nobody knows why BearWhale was so eager to sell. But this was no casual maneuver.
The huge sell order was placed through a Bitcoin exchange called Bitstamp. It was so large that distorted the Bitcoin markets, temporarily putting up a “wall” that caused the price of Bitcoin to stall at $300 for several hours while all 30,000 of the seller’s coins were sold off.
After that, the price of a Bitcoin has moved up, to around $340. A sell order that big meant that someone with a lot of Bitcoin was trying to sell down his or her holdings, fast. Pretty soon, the anonymous trader had a nickname: “BearWhale,” an homage to JPMorgan Chase’s notorious London Whale.
This was the most bizarre thing that the crypto world has ever seen.
HOW TO USE
Most of the holdings today are sold by now. And at current prices, the bearwhale’s remaining crypto will run out soon enough. Whether that will signify a recovery is unclear.
At the same time, it’s also worth noting that bitcoin prices have more or less been tracking with the rest of the altcoin market.
Leaving the potential impact of the bearwhale’s sell-offs in doubt. Bearwhale watching might be more about the spectacle itself than anything else.
But the spectacle is also good.