blackrock

Crypto whales: Friends or foes?

Published

3 days ago

December 31, 2024

The closing weeks of 2024 saw vintage crypto wallets waking and moving tens and hundreds of tokens to exchanges or other addresses. Public curiosity is by far not the only impact of such transactions. Let’s see how the whale transactions influence the market and why not everyone is happy about them.

The whales’ transactions Christmas rampage

On Dec. 25, 2024, the Bitcoin wallet that was kept untouched for nearly 14 years moved 20.55 BTC to another address. During the years in the wallet, these coins gained over $2 million in value. The same day, a different wallet released 210 BTC after ten years of inactivity. This BTC stash grew by $20 million while being hodled.

Two days later, someone moved 1,940 ETH from the pre-mine address to Coinbase. These ether tokens were dormant from the launch of the Ethereum network. The following days saw other huge transactions involving long-time sleepers.

For instance, on Dec. 29 it was reported that someone sent 7,000 BTC from the address that was inactive for seven years to several different addresses, splitting the sum into seven 1,000 BTC outputs.

This chad held on to 7,000 BTC for 7 years, hodled from 62M$ to 663M$, the funds haven’t been sold they just split them into 1,000 BTC addresses.https://t.co/1FhOHUjUOH
— Sani | TimechainIndex.com (@SaniExp) December 29, 2024

Reporters share the opinion that these bitcoins weren’t sold; they just moved to other wallets. In seven years, the 7k BTC stash value grew by several hundred million dollars. On the same day, the address that had been silent since 2014 sent 357.4 BTC to other addresses.

When whales hold

As of Dec. 30, 2024, there are four wallets holding nearly 650k BTC, which is over 3% of the total supply. All of these addresses are the cold wallets of the crypto exchanges. According to the Bitinfocharts tool, less than 100 Bitcoin addresses hold around 15% of the entire supply; many of these addresses probably belong to individuals. If they decide to move their millions worth of crypto coins, it may trigger a bearish reversal even in the uptrend.

When whales hold their crypto, they decrease its liquidity. Just think of billions worth of cryptocurrency that has not moved for years! Almost half of all bitcoins are held in wallets that have between 100 and 10,000 bitcoins on the balance. This group of whales impacts liquidity and value the most. Many of them haven’t moved crypto for years, sometimes over 10 consecutive years, effectively keeping large amounts of crypto out of the market.

When whales sell

When whales get rid of their crypto, they signal other investors that someone who held millions worth of the asset in question decided that the asset isn’t worth it anymore. And everyone sees it!

The whales’ transactions don’t go unnoticed, as thanks to the Bitcoin network’s transparency, these addresses are known, listed, and monitored. Each massive transaction makes headlines and triggers much talk on the Internet. Some people, especially those who don’t follow the trading/investment strategy or even don’t have one, fall for emotions and start to panic. When many people panic simultaneously, they may flip the market or increase the price volatility – not necessarily for a long period, but still. The whales who don’t want to cause disturbance dump their crypto gradually.

Most transactions described in the previous chapter seemingly have one goal–the owners move crypto from the legacy Pay-to-Public-Key-Hash (P2PKH) addresses to modern wallets that provide better privacy and security. They cannot be attributed to so-called “whale dumping” that serves as a bearish signal.

Alleged market manipulations

On Dec. 27, 2024, the “Rich Dad Poor Dad” author, Robert Kiyosaki, took to X to accuse the BlackRock CEO Larry Fink of dumping Bitcoin. According to Kiyosaki, BlackRock is “suppressing Bitcoin price, so the whales can buy Bitcoin at under $100k.”

Larry Fink dumping Bitcoin. VIVEK warned Larry Fink of BLACK ROCK is a Marxist. Vivek warned Fink & Black Rock are Share Holder Capitalist not Stake Holder Caplitist. Share Holder Capitalists are Marxist….like Klaus Schwab who state: “Someday you’ll own nothing and you’ll be…
— Robert Kiyosaki (@theRealKiyosaki) December 27, 2024

Although we don’t have evidence to support or dispute Kiyosaki’s claim, we must admit that institutions and individuals holding large amounts of crypto are often subjected to such claims. The alleged market manipulation conducted by Tether is one of the best-known cases. The battle for the truth continues as of December 2024.

Why would someone accuse whales of intentional price manipulations? First off, whales really can impact the prices. Whales may sell a large amount of BTC, sending the price down, re-buy what was sold during retracement at a discounted price, and enjoy profit made out of the price differences. Other tactics available for whales include rug pulls and wash trading.

Ripple Labs admitted having used trading bots in the past. However, it doesn’t outrightly agree with the accusations of using them to manipulate the XRP price.

Crypto whales: friends or foes?

Just like the natural whales in the oceans, crypto whales are not friends or foes. Rather, they are large bodies minding their own business. If we know how they impact the market when they spend crypto, we can react to the whale alerts accordingly and avoid trouble. The only exception is the whales consciously manipulating the prices. However, the same means, namely, preparedness and caution, may save us from them too.

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21 Million

No, BlackRock Can't Change Bitcoin

Published

2 weeks ago

December 21, 2024

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Recently, BlackRock released an educational video explaining Bitcoin, which I thought was great—it’s amazing to see Bitcoin being discussed on such a massive platform. But, of course, Bitcoin X (Twitter) had a meltdown over one specific line in the video: “There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.”

HealthRnager from Natural News claimed, “Bitcoin has become far too centralized, and now the wrong people largely control its algorithms. They are TELLING you in advance what they plan to do.”

Now, let me be clear: this is total nonsense. The controversy is overhyped, and the idea that BlackRock would—or even could—change bitcoin’s supply is laughable. The statement in their video is technically true, but it’s just a legal disclaimer. It doesn’t mean BlackRock is plotting to inflate bitcoin’s supply. And even if they were, they don’t have the power to pull it off.

Bitcoin’s 21 million cap is fundamental—it’s not up for debate. The entire Bitcoin ecosystem—miners, developers, and nodes—operates on this core principle. Without it, Bitcoin wouldn’t be Bitcoin. And while BlackRock is a financial giant and holds over 500,000 Bitcoin for its ETF, its influence over Bitcoin is practically nonexistent.

Bitcoin is a proof-of-work (PoW) system, not a proof-of-stake (PoS) system. It doesn’t matter how much bitcoin BlackRock owns; economic nodes hold the real power.

Let’s play devil’s advocate for a second. Say BlackRock tries to propose a protocol change to increase bitcoin’s supply. What happens? The vast network of nodes would simply reject it. Bitcoin’s history proves this. Remember Roger Ver and the Bitcoin Cash fork? He had significant influence and holdings, yet his version of bitcoin became irrelevant because the majority of economic actors didn’t follow him.

If Bitcoin could be controlled by a single entity like BlackRock, it would’ve failed a long time ago. The U.S. government, with its endless money printer, could easily acquire 10% of the supply if that’s all it took to control Bitcoin. But that’s not how Bitcoin works. Its decentralized nature ensures no single entity—no matter how powerful—can dictate its terms.

So, stop worrying about BlackRock “changing” Bitcoin. Their influence has hard limits. Even if they tried to push developers to change the protocol, nodes would reject it. Bitcoin’s decentralization is its greatest strength, and no one—not BlackRock, not Michael Saylor—can change that.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Bitcoin

BlackRock’s New Bitcoin Ad Is A Monumental Paradigm Shift

Published

2 weeks ago

December 19, 2024

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Yesterday, BlackRock released a new video aimed at educating people interested in Bitcoin on the asset class.

The video is quite good, honestly. I think they took inspiration from Saifedean Ammous’ book “The Bitcoin Standard,” which discusses the history of money from the beginning of time and how it has changed and evolved throughout history.

Launched in January, IBIT has now topped $50 Billion in assets as investors are increasingly using the ETP to get efficient exposure to bitcoin’s price. Yet many investors are still relatively new to the digital assets space. For those looking to learn more about what bitcoin is… pic.twitter.com/8wh9CW0xYa
— Jay Jacobs (@JayJacobsCFA) December 17, 2024

Seeing this type of educational Bitcoin content from a $11.5 trillion asset manager is something that I think will really resonate with their target audiences.

Watching the video, there was one moment in particular that stood out to me. BlackRock was highlighting where Bitcoin is today and said, “Bitcoin is no longer seen as the radical idea it was 15 years ago. Over 500 million people around the world now use cryptocurrency, with over 50% holding or investing in Bitcoin.”

That right there screams to me that Bitcoin is becoming recognized as a legit and established asset class in the eyes of the financial elite, and then eventually the mainstream.

In the early days, Bitcoin really was such a radical new idea that probably 99% of people could not conceptualize. However, over time, Bitcoin has proven itself time and time again to be a legit asset and people are now interested in embracing this new form of money. It feels like there has been a sincere paradigm shift and that we are slowly, but surely, leaving the point in history where the majority of people think Bitcoin is a scam and bad for any other generic FUD that has already been thoroughly debunked.

With that being said, I’m not saying everyone is on the verge of becoming a bitcoin maximalist or anything, but I do think that more and more people are becoming accepting to the fact that Bitcoin is here to stay and that it’s not going anywhere — which I would think eventually leads to people saying “I should probably own some bitcoin then.”

This isn’t just anyone saying Bitcoin is becoming a legit asset, this is the world’s largest asset manager. BlackRock is putting their reputation behind Bitcoin and projecting confidence in the long-term success of it. And so far it has been an amazing play by them embracing Bitcoin, with their spot Bitcoin ETF being the most successful ETF launch in history.

When they speak highly of a potentially profitable investment, people listen. I think in particular, the wealthy and accredited investors are the first to take notice and advantage of BlackRock’s signalling here. Eventually this will be followed by retail investors.

I believe Bitcoin is set to enter an entirely new paradigm unlike anything we’ve seen before.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Bitcoin

Put Options for BlackRock’s Bitcoin (BTC) ETF at $30, $35 See High Volume – What’s Happening?

Published

3 weeks ago

December 16, 2024

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Surging volumes in put options linked to BlackRock’s Nasdaq-listed spot bitcoin ETF (IBIT) could be interpreted as bearish sentiment. That’s not necessarily the case.

On Friday, more than 13,000 contracts of the $30 out-of-the-money (OTM) put option expiring May 16 changed hands as the ETF rose 1.7% to $57.91, according to data from Amberdata. Volume in the $35 put option expiring Jan. 16, 2026, topped 10,000 contracts.

Most of the activity probably stems from market participants looking to generate passive income through “cash-secured put selling” rather than outright purchase of the options as bearish bets, according to Greg Magadini, Amberdata’s director of derivatives.

A put seller, offering insurance against price drops in return for a premium, is obligated to purchase the underlying asset at a predetermined price on or before a specific expiration date. (That’s opposed to the buyer of the put, who has the right but not the obligation to sell the asset.)

That means savvy traders often write OTM puts to acquire the underlying asset at a lower price while pocketing the premium received by selling the put option. They do so by continuously maintaining the cash required to purchase the asset if the owner of the put option exercises their right to sell the asset.

Hence, the strategy is called “cash-secured” selling of puts. In IBIT’s case, sellers of the $35 put expiring in January 2026 will keep the premium if IBIT stays above that level until expiry. If IBIT drops below $35, the put sellers must buy the ETF at that price while keeping the premium received. The sellers of the $30 put expiring in May next year face a similar payoff scenario.

“The $35 Puts for Jan 2026 traded +10k contract with an IV range of 73.52% to 69.94%, VWAP at 70.75% suggests net selling from the street… potentially Cash Secured put selling flows (for traders who missed the rally),” Magadini said in a note shared with CoinDesk.

IBIT options volume on Friday. (Amberdata)

Saxo Bank’s analyst suggested cash-secured put selling as the preferred strategy in Nvidia early this year.

Calls are pricier than puts

Overall, IBIT call options, which offer an asymmetric upside to buyers, continue to trade pricer than puts.

As of Friday, call-put skews, with maturities ranging from five to 126 days, were positive, signaling relative richness of implied volatility for calls. The bullish sentiment is consistent with the pricing in options tied to bitcoin and trading on Deribit.

On Friday, IBIT recorded a net inflow of $393 million, representing the majority of the total inflow of $428.9 million across the 11 spot ETFs listed in the U.S, according to data tracked by Farside Investors.