With any industry or even just a new asset, there are those who get in on the ground floor. Whether they are far-seeing visionaries, hobbyists who just get lucky, or investors who take a gamble and get surprised when it pays off, they wind up very rich and running that corner of the world.
Think Rockefeller and Standard Oil, the founders of AT&T and the telephone system, or Henry Ford and his assembly line. They are oversized investors whose moves define the market and the later investors have to roll with it. In altcoin, these are called “whales.”
Whales are, overwhelmingly, early adopters. The most visible example in bitcoin are the Winklevoss twins, who invested a modest part of their settlement over who invented Facebook in bitcoin and became billionaires. The problem for the rest of the altcoin world is that these whales have outsized influence and what they do can crank the volatility of altcoins through the roof.
This is not necessarily a bad thing. They are called whales because when they make moves, those moves cause waves that smaller investors can ride. However, it requires keeping a close eye on the market to see whether a whale is buying or selling. There are a set of signs, like a jump in buying volume compared to sales volume in trading, or a jump in sales volume.
However, you have to remember the flip side of the metaphor. If a whale breaches the market and crushes you, it is not going to notice. Need help whale-watching? Subscribe to the Bitcoin Market Journal newsletter today!