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Crypto Whales Accumulate $3 Billion in Bitcoin in January, Data Shows

Significant players in the cryptocurrency market, commonly referred to as crypto whales, have been actively accumulating Bitcoin (BTC) this month, amassing a combined total of $3 billion worth of the leading cryptocurrency.

Data provided by onchain analytics company IntoTheBlock reveals that the quantity of Bitcoin held within whale wallets has grown by approximately 76,000 BTC. This increase has brought the total holdings of these whales to nearly 7.8 million BTC.

It’s worth mentioning that the term “whales” encompasses any entity, individual, or fund holding more than 1,000 BTC, which also includes ETFs.

Whales Exploit Bitcoin Dip to Accumulate More

Bitcoin began the month on a positive note, reaching highs above $48,900 on January 11, mainly driven by the introduction of U.S.-based spot exchange-traded funds (ETFs). Nevertheless, prices encountered downward pressure and dropped to lows near $38,500 last week, as investors in the Grayscale Bitcoin Trust (GBTC), a popular crypto investment vehicle, decided to cash in their profits.

Taking advantage of the lower valuations, some significant cryptocurrency investors, known as whales, opted to acquire more Bitcoin through the Bitfinex cryptocurrency exchange. According to IntoTheBlock’s weekly newsletter, while Bitcoin ETFs witnessed net inflows of $820 million, Bitcoin whales increased their holdings by approximately $3 billion, equivalent to 76,000 BTC, in the early part of 2024.

The data provided by IntoTheBlock displays a blue line representing whale activity, while the black line illustrates Bitcoin’s price movements. This data suggests that despite short-term price fluctuations, whales have maintained confidence in the cryptocurrency’s long-term potential and continued to accumulate Bitcoin during market dips.

Several analysts and investment banks, including Standard Chartered, have expressed optimism about the newly launched Bitcoin ETFs, foreseeing that they will attract billions of dollars in investments and potentially drive the cryptocurrency’s market price to reach $100,000 by the end of 2024.

Crypto Whale Impact on the Market to Diminish After Spot ETFs

Aurelie Barthere, Principal Research Analyst at Nansen, suggests that the authorization of spot Bitcoin ETFs will have a particular effect on cryptocurrency whales, individuals or entities holding a significant portion of the existing token supply, and possessing substantial influence within spot markets.

Barthere commented during a recent interview with Cryptonews.com, stating, “We are aware that cryptocurrency token ownership is heavily concentrated, with ‘whale’ wallets controlling a significant portion of the token supply. Any alteration in this distribution is likely to lead to a decrease in long-term price volatility, intuitively.”

Barthere also expressed her viewpoint that the introduction of ETFs is likely to enhance liquidity within the spot markets, potentially contributing to a more stabilized market environment.

In terms of the immediate performance of these ETFs, Barthere anticipates that ETFs with lower fees will attract greater capital inflows.

Barthere suggests that the competitive dynamics among Bitcoin spot ETF providers will be influenced by factors such as reputation, size, their existing market presence, and the fees charged.

JPMorgan analysts have also made predictions, emphasizing that the success of these newly established ETFs will depend heavily on the fees they impose and their ability to maintain liquidity.

Considering the relatively high 1.5% fees associated with GBTC (Grayscale Bitcoin Trust), they anticipate a substantial outflow of funds from this Bitcoin trust.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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