What are big Bitcoin investors waiting for?

Bitcoin is breaking records, the market is booming, the halving is imminent. And the "big players": are apparently still asleep. Compared to previous upswings, there are significantly fewer new whales. While 4,000 millionaires were added every day in 2021, when Bitcoin hit its previous record high, that number is currently only half. The price is several thousand dollars higher than the previous record high. The reasons for this are open to speculation. The phenomenon could indicate that wealthy investors are still participating in the rally with the handbrake on. Or that they are waiting for a sell-off - and that the price is taking a breather for now.

Misleading radio silence?

Whale population usually rises when stock prices reach new highs. With the exception of the current upward trend, as the analysis platform Kaiko stated in a report, "Despite the recent price rise, Whale's on the blockchain are making a slow comeback."

According to Kaiko, the number of "millionaire wallets," that is, wallets hoarding Bitcoin for more than a million US dollars, is currently under "two thousand per day." And so that is strikingly lower than previous figures. "During the last bull market, more than four thousand wallets reached the million mark daily and more than two thousand wallets reached ten million dollars," the analysis said.

There were many more Bitcoin millionaires in 2021 | Source: Kaiko

Analysts cite several possible reasons for this. It is conceivable that "new capital has not yet fully arrived." This would mean that there is still a correspondingly large inflow coming - with a positive effect on the price.

However, it is also possible that Whales are "taking profits" while "Bitcoin is hitting new highs." This, in turn, would be an indicator that demand among large investors could stagnate in the near term and the price could be pressured accordingly. A third, more mundane alternative: Whales store their "holdings in depository banks and not in personal wallets."

Whales exercise patience

The trend could also be related to ETF registrations. For several weeks now, huge amounts of capital have been flowing into the market through these funds, and Bitcoin's record high is largely due to this. However, Bitcoin is held by providers and not in personal wallets. As a result, Kaiko's findings could be somewhat biased and the actual number of "Bitcoin millionaires" could be higher.

According to Kaiko, this development generally indicates more wait-and-see behavior. Possibly a lesson from previous record weeks, which quickly turned into the opposite. "In 2021, there was a huge influx of capital as all kinds of bulls tried to capitalize on the crypto hype. This time, Whales may take a more cautious approach and wait to see if the gains hold up before investing."

Bitcoin correction imminent?

With Bitcoin's recent strong price performance, the likelihood of setbacks has probably not diminished. For example, there was one on March 5, when the price fell USD 8,000 in a single day. Right now, the decline appears to be large. Compared to the previous month, the price has increased by US$25,000.

The Fear and Greed Index, which has been at "greed" for weeks, could also be a harbinger of a slowdown. While this reflects a generally positive mood in the market, it could also be interpreted as a warning of an imminent correction. High values often indicate that the market could be overheating. This can also be seen in the current hype surrounding memecoins.