What is a whale?
In English, a “whale” can refer to a small fish, or to an individual or organization that is considered small or insignificant.
The same concept applies to the world of cryptocurrency. A minnow is someone who owns a relatively small amount of a digital asset. This means that when they buy or sell cryptocurrencies, they are unlikely to have a significant impact on the rest of the market.
This is inconsistent with whales – whales are very few individuals and institutions that hold large amounts of cryptocurrencies such as Bitcoin. If they decide to sell their holdings, there is a very real risk that they could affect the spot price on exchanges.
In rare cases, even minnows can have a large impact. Some altcoins trade at very low levels and have severe illiquidity, which means that prices can change dramatically after even a modest sale.
There is no exact definition for how much cryptocurrency investment someone needs to hold to be considered a minnow. However, research shows that a large number of investors do fall into this category.
Even though the vast majority of addresses on the Bitcoin blockchain hold less than 0.1 Bitcoin, they collectively own only 1% of the BTC currently in circulation.
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