SOME OF THE SIGNIFICANT EFFECTS OF CRYPTOCURRENCY WHALES ON THE CRYPTOCURRENCY MARKET.

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Good day to you all, the titile of today's post is basically "some of the significant effects of cryptocurrency whales in the cryptocurrency market" today's topic seems to be a very interesting one but before I begin to discuss and explain some of the significant effects and impacts of cryptocurrency whales on the cryptocurrency market, I would like to first discuss and write introductory paragraphs which will contain things like the definition of a cryptocurrency whale.

What or who are cryptocurrency whales? The term cryptocurrency whales can be defined simply as individuals or entities participating in the cryptocurrency market, they are big time cryptocurrency participants who hold and own very large and vast amounts of a particular cryptocurrency token or asset, the amount of cryptocurrency token or asset they hold is so much that it is allows the individual or cryptocurrency participant the ability to significantly influence the cryptocurrency market by their actions and activities whether intentional or not.

The name or term "whale" was chosen and picked to represent these individuals and entities because of the fact that the whale is the largest and biggest creature in the world therefore providing a suiting description of users and cryptocurrency participants who are the biggest and largest based on the amount of assets and tokens they possess in the cryptocurrency market, cryptocurrency whales have the power to influence the cryptocurrency market and their actions affect and impact the cryptocurrency market in the following significant ways.

PRICE MANIPULATION

Looking at and considering the different significant ways in which the actions and activities of the cryptocurrency whales influence and affect the cryptocurrency market the first one that comes to mind is their ability to influence and even manipulate the prices and value of the cryptocurrency token and asset and they have this ability or this ability to manipulate the prices of the cryptocurrency token is as a result of the amount of that cryptocurrency token and asset they own or hold in the cryptocurrency market.

Therefore when cryptocurrency whales take specific or certain actions, and carry out certain activities like basically executing large buy or sell orders, they basically create significant price movements, the price can either go up or down and often cryptocurrency whales also have the ability to carry out something known as "pump and dump schemes", this is a case or situation whereby the whales buy large enough amount of a particular cryptocurrency asset therefore causing the price of that cryptocurrency to rise,

Just so they could now go back and self off all their holdings of that particular cryptocurrency at a higher or increased price that they influenced and manipulated for the purpose of making profit basically, this manipulation of cryptocurrency prices basically through pump and dump schemes undermines the cryptocurrency market's fairness and creates a lot of risks and challenges for the cryptocurrency market and its users.

DETERMINES MARKET LIQUIDITY

Another significant effect of the actions and activities of cryptocurrency whales in the cryptocurrency market is basically that they also have the ability to influence the liquidity supply of the different cryptocurrency tokens and assets in the cryptocurrency market, they basically have the ability and power to facilitate and determine how liquid a certain cryptocurrency asset or token is in the cryptocurrency market therefore this means that how easy or hard it is for a cryptocurrency asset to be converted to cash can be determined by the activities and influence of the cryptocurrency whales.

How do I mean? Well basically when the cryptocurrency whales carry out actions or activities like actively trading and buying or selling of particular cryptocurrency assets and tokens they basically increase liquidity of that asset in the cryptocurrency market ensuring smoother transactions for all market participants.

While on the other hand, when cryptocurrency whales decide to hold their assets and tokens it has another effect which is that it reduces the liquidity of the cryptocurrency market thereby making it harder for smaller traders to execute and carry out their own trades without price slippage therefore either of the activities or actions a cryptocurrency whale can take will both have effects on the cryptocurrency market.

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INCREASES MARKET VOLATILITY

Increasing the volatility of the cryptocurrency market is another effect of the actions and activities of cryptocurrency whales this basically as a result of the fact that the presence of cryptocurrency whales and the significance or largeness of the trades and transactions they tend to facilitate, execute or carryout basically contribute to heightened and increased market volatility especially because of the decentralized nature of cryptocurrency assets and tokens causing unpredictable price swings and changes.

Therefore, what this simply means is basically that if a cryptocurrency whale decides to sell a significant portion or amount of their cryptocurrency assets it will basically cause and lead to a sudden increase in the rate and level of supply which can basically lead to rapid changes basically decease in prices and as a result there will be a lot consequences one of which is panic selling among smaller investors, this volatility, while offering opportunities to make profit, also increases the risk of losses, particularly for inexperienced and unskilled traders.

CONCLUSION

Therefore, in conclusion, cryptocurrency whales can be said to be having or wielding very immense power and influence in the cryptocurrency market allowing them to manipulate and control the movements of the prices of cryptocurrency assets and tokens, liquidity, volatility, investor psychology, and so on, I do hope that you all enjoyed reading this today's post and that you will be dropping your comments thank you for the time and effort, really, thank you.