One of the things Bitcoin is known for is its volatility. It’s no stranger to huge and rapid rises as well as dramatic declines. In mid-December 2017 the cryptocurrency reached its all-time high, surpassing the $19,850 mark, only to crumble and fall below $12,000 within mere days and drop below $7,000 by February. At some point, it’s value dropped by a whopping $2,000 in a single hour.
There’s no telling what Bitcoin’s price will be in a years time. It could, in theory, drop down to almost zero, it could stay roughly the same as it is now, or it could rise again, doubling, tripling, quadrupling in value or soaring tenfold. No one can accurately predict what’s going to happen, no matter how well they understand the technology or how much market analysis they’ve done.
For instance, John McAfee is so confident in Bitcoin’s bright future, he posted a tweet saying that he’ll eat his, erm, private part on national television if one BTC won’t be worth at least $500,000 in three years time. Warren Buffet, on the other hand, predicts that Bitcoin will definitely come to a bad ending.
A man drinking coffee in a ‘Keep calm and HODL’ cup
In the cryptocurrency community, the most popular investment strategy is called hodling, which of course means holding the asset instead of selling it. The team was ‘coined’ by an apparently drunk user who posted ‘I AM HODLING’ on the Bitcoin Forum in December 2013. The term quickly became a meme and is now one of the essential slang terms in the community. HODL is now also a backronym for ‘hold on for dear life.’
Finally, you’ve probably heard this one already, but it’s essential that you keep this in mind: Bitcoin is an extremely risky investment, so never, never ever invest more money than you can afford to lose. We’ve warned you.
What is a Bitcoin whale
Whales are the world’s largest mammals, and Bitcoin Whales are the largest players on the Bitcoin market. Those are typically not individuals, but institutions such as Hedge Funds and Bitcoin Investment Funds. For instance, Pantera Capital, Bitcoins Reserve, Bitcoin Investment Trust and others.
These institutions typically move around hundreds of thousands of Bitcoins. It’s a very covert operation: those funds arrange a special agreement with an exchange to move such big amounts through exchanges out of sight of regular traders.
According to a recent Bloomberg report, just 1,000 people own 40 percent of the market. In fact, those people own so much; they can send the market into a frenzy by selling just a fraction of their assets.
There are currently more than 25 mln people worldwide that own Bitcoins, according to this study. Interestingly enough, it only takes around 0.153 BTC to be in the top 30 percent of Bitcoin holders in terms of the amount owned. To be in the top one percent, you ‘only’ need to have 15 BTC to your name.