Becoming a crypto investor is close to mainstream nowadays, as companies adopt Bitcoin for transactions. The cryptocurrency showed considerable value for an investor’s portfolio through the years and remained relevant in the market despite challenging volatility and competition.
Owning Bitcoin is pretty straightforward. You check how to Purchase Bitcoin and sell it according to market trends. Or, you could hold it until volatility spikes are not that significant to protect your valuable portfolio.
But since the cryptocurrency ecosystem is so expanded, there’s so much to learn about it. For instance, not all investors know the different levels of holding that websites refer to because not all have a significant impact on the market. While everyone knows about whales, there are many other essential network participants. Let’s explore them.
Shrimps
If you’re a beginner investor, you’re called a shrimp. This category represents the vast majority of a cryptocurrency community, as these participants hold few digital coins and have only started investing.
While it may seem like they don’t contribute to the network invidiously, their collective efforts bring liquidity and vitality within blockchains, since newer shrimps are always coming, and are continuously evolving. Usually, a shrimp holds less than one Bitcoin.
Crabs
As shrimps start to get a hold of the market, their investments expand, making it possible for them to own from one Bitcoin to ten coins, which is significant considering its value. There are hundreds of thousands of crabs on the market, holding about 8% of the total BTC supply.
Crabs earned more experience investing in diversified assets, such as altcoins, stablecoins, and NFTs. Their contribution is more significant than that of shrimps, as they are confident enough to venture into new markets.
Octopi
Considering the massive ecosystem of cryptocurrency, investing is still safe because it dwells on an asset for longer, so there’s no timely pressure of buying and selling. That’s where a more experienced investor, an octopus, is determined because it is engaged in trading and expanding its strategies.
Octopi are deliberately looking to maximize its returns so that it can earn up to 50 BTC. There are fewer entities in the markets than crabs because the ownership hierarchy changes as individuals own more cryptocurrencies.
Fish
As we step up the ladder, we get to the fish, which is about thousands of crypto owners. They have much larger holdings and are important players in the market, with as much as 100 BTC. Hence, they own about 5% of the entire supply.
The fish step may be one of the most challenging to escape because at some point it’s getting more difficult to increase your investments and become an entity that can influence the market. That’s why fish are so essential.
Dolphins
With moderate-sized portfolios, reaching the dolphin level means being able to influence the market in some way. While they’re incomparable with whales, dolphins are much more critical than shrimps because their buying power might impact small-cap cryptocurrencies, such as newer altcoins or minor NFT projects.
There are about ten thousand dolphins on the market, holding more or less than 12% of the supply, meaning they can have even up to 500 BTC. This puts the dolphins right below the category of more prominent players.
In crypto, shark investors are similar to the animals, as they’re likely to hunt for opportunities. Elon Musk is considered to be a shark, as he used to buy considerable amounts of Bitcoin, which would trigger significant interest from crypto investors.
Still, it’s considered that crypto sharks are leading to fake news, pump and dump schemes and FOMO as they only hunt good prices. Sharks can have between 500 and 1,000 BTC holdings and are about hundreds of thousands on the market.
Whales
Whales are usually what regular investors follow, because their crypto movements are so massive that prices are radically influenced. Whales have incredibly massive portfolios, and when they make a significant transaction, the prices of coins like Bitcoin or Ethereum are immediately impacted.
Investors closely monitor crypto whales, such as Tesla, to identify any potential forthcoming transactions and adapt their portfolios. Whales’ holdings start from 1,000 to 5,000 BTC and hold about 15 of the total supply.
Humpbacks
Humpbacks are the final boss of the crypto holding hierarchy, as they possess more than 5,000 BTC. There are only a few hundred humpbacks, and their power to shape marketplace dynamics is unimaginable.
Humpbacks are often large institutions and wealthy people who either invested early or had the resources to put into Bitcoin to reach this level. Humpbacks and whales are usually the subject of continuous tracking and monitoring.
How Do These Investors Impact Market Prices?
Whales especially have a significant influence on the crypto environment. For instance, their asset movements can trigger bull or bear markets since the investor sentiment index is linked with whales’ strategies. When whales sell a considerable amount of assets, prices further decline as investors follow their investments.
Moreover, whales have an impact on market cycles and price trends, as their trades increase volatility, which translates into rapid price fluctuations and market uncertainty. Users should also consider that whales can sometimes time their strategies to make the most out of market trends and manipulate prices.
Most importantly, whales can impact market liquidity, which is one of the most important elements in market efficiency and stability. That’s why, when whales operate large sell-offs or purchases, the prices can swing and create imbalances between supply and demand, affecting regular investors. The decline of liquidity can therefore make the market more exposed to manipulation.
What Do You Think About The Crypto Hierarchy?
The crypto hierarchy categorizes investors based on their holdings and their effect on the market. While shrimps are the smallest denominator of an investor, with less than one Bitcoin as a holding, humpbacks own more than 5,000 BTC. The latter have such an impact on the crypto market that they can determine how prices are moving.
