Assets of Crypto Whales: Should You Follow Their Strategy?

Today some players influence greatly on market trends in the world of cryptocurrencies, dictating price fluctuations and shaping investment narratives. These are crypto whales capable of changing the market with a single transaction. So  here is a question: do you need to understand their strategies  to successfully navigate the volatile cryptocurrency landscape?

Just as rare coin collectors carefully examine historical mintage and nuances to determine a specific value of coins like a 1955 wheat penny value, investors carefully analyze whale movements to identify profitable opportunities. Due to the ability to recognize how they trade and allocate their assets you can find out valuable insights into sustainable long-term investment strategies.

While Whale primarily invests in cryptocurrencies, their portfolios often extend beyond digital assets. Ranging from NFTs to physical collectibles such as rare coins, they utilize a variety of strategies to hedge risk, preserve wealth, and capitalize on emerging trends. Here we would like to look at what assets crypto whales own and whether retail investors should follow in their footsteps.

Who Are Crypto Whales and Why Should You Pay Attention to Them?

A crypto whale is an investor or entity that owns a large amount of cryptocurrency, typically 1,000 BTC or more. These people or organizations include early Bitcoin adopters, institutional investors, hedge funds, and even cryptocurrency exchanges themselves.

Since Bitcoin has a limited supply of 21 million coins, whales collectively control a significant portion of the market. The same applies to large holders of Ethereum and other major cryptocurrencies.

How Whales Influence the Market

Because of their substantial holdings, whales have the ability to cause sharp market fluctuations with a single trade. Their movements can result in:

• Price manipulation: Large buy orders can drive prices up, while mass sell-offs can trigger market crashes.

• Liquidity shifts: When whales move assets off exchanges to cold storage, it reduces available liquidity, potentially leading to increased price volatility.

• Psychological impact: Traders react to whale movements, often making emotional decisions based on observed activity.

A single Bitcoin transaction by a whale, whether a massive accumulation or a sudden sell-off, can cause ripple effects throughout the crypto ecosystem.

So how and why to track whale activity? Whale activity in the cryptocurrency market can be tracked with some solutions: using blockchain-based analytics platforms (Whale Alert, Glassnode and CryptoQuant) that provide real-time alerts on large transactions. In addition, monitoring exchange order books on platforms such as Binance or Coinbase will allow investors to identify whale movements on walls of buys and sells. Blockchain data, such as wallet transactions visible on Etherscan or Bitcoin Explorer, will also provide insight into whale behavior, helping to detect significant buying or selling activity. Using these tools, retail investors can benefit from tracking whale activity to make informed decisions. 

Where Do Whales Invest? Key Asset Categories

Crypto whales don't just hold Bitcoin and Ethereum - they strategically allocate their capital across multiple asset categories to hedge risk and maximize returns. Due to the diversification of their investments, they provide stability during volatile market cycles and capitalize on opportunities. So, below you may see where and why whales invest their money.

Cryptocurrencies: The Core of Whale Portfolios

Unsurprisingly, bitcoin (BTC) remains the primary asset in most whales' portfolios. Bitcoin is often referred to as “digital gold,” and its scarcity (there are only 21 million BTC in existence worldwide) makes it a hedge against inflation. Most whales accumulate bitcoin for long-term holding (HODLing), reducing supply and providing price growth over time.

Ethereum (ETH) is the second most popular holding among whales. Unlike Bitcoin, Ethereum serves as the backbone of decentralized finance (DeFi) and the NFT ecosystem. Many whales stake ETH to earn passive income, securing the network while receiving rewards.

Aside from BTC and ETH, whales also invest in high-potential altcoins, particularly those with real-world applications. Some notable examples include:

• Binance coins (BNB) are used for trading fee discounts and powering the Binance Smart Chain.

• Solana (SOL) is a fast blockchain with low transaction costs, popular among NFT and DeFi projects.

• Avalanche (AVAX) is known for its high-speed transactions and growing ecosystem.

• Layer-2 Solutions (Polygon, Arbitrum, Optimism)  are the choice of whales to invest in scalability-focused projects to take advantage of Ethereum's congestion issues.

Stablecoins, e.g., USDT, USDC, and DAI, also play a role in whale portfolios. These assets are safe during bear markets and allow whales to quickly deploy funds when new opportunities arise.

Tip: Retail investors should also diversify their holdings, focusing on established cryptocurrencies while allocating a small percentage to promising altcoins.

NFTs and Digital Assets: A New Frontier for Whales

Over the past few years, whales have expanded into the world of Non-Fungible Tokens (NFTs). These digital assets serve as collectibles, digital art, and even virtual real estate. Some of the most valuable NFT collections include CryptoPunks, one of the earliest and most sought-after projects, and Bored Ape Yacht Club (BAYC), known for its exclusivity and celebrity owners. Virtual land in the Metaverse, such as in The Sandbox and Decentraland, is also a major investment for whales. 

Interesting fact: A striking example of NFT value was Beeple’s artwork Everydays: The First 5000 Days, which sold for $69.3 million in 2021. However, the NFT market remains highly speculative, with many projects collapsing due to overhype.

Taking all the above, investors should deal with NFTs cautiously, only investing in projects with strong communities and long-term potential.

Physical Assets: Rare Coins and Collectibles

While whales primarily invest in digital assets, many also diversify into tangible investments, i.e. rare or investment coins and collectibles. These assets serve as an additional safe haven in case of inflation and financial crises.

Some whales acquire rare cryptocurrency-themed coins, such as physical Bitcoin collectibles and commemorative blockchain-related pieces. Additionally, traditional numismatic coins (especially pieces with historical significance) are also sought after.

Example of real coins that can to of interest to crypto whales to invest in:

However, investing in rare coins requires authentication and expert evaluation to avoid counterfeits. Investors should work with certified grading agencies such as the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC) to receive professional authentication and grading of rare coins or use modern tools as the first stage to find out more coin details, nuances and even the current market value.

Should You Follow the Whale Strategy? Tactics and Risks

Crypto whales hold massive amounts of cryptocurrency and influence market movements, but should smaller investors copy their strategies? While whales benefit from large capital, insider knowledge, and patience, their methods don’t always translate well for retail investors. Here’s what you need to know.

Long-Term Holding (HODL): The Whale’s Patience Game

Whales often buy and hold (HODL) crypto for years, ignoring short-term price swings. This works because:

• Bitcoin and Ethereum follow long-term growth cycles - historically rewarding patient investors.

• Whales don’t panic sell during crashes; instead, they buy more when prices drop.

• Scarcity increases value - when whales remove large amounts of BTC or ETH from circulation, prices tend to rise.

Interestingly, over 60% of Bitcoin has not moved for more than a year, showing strong long-term conviction. But what should you do if you are an investor? For retail investors, HODLing can be a smart strategy, but only for proven cryptocurrencies like Bitcoin and Ethereum. Many altcoins lose value over time, so research fundamentals before committing long-term.

Trading and Strategic Manipulation: A Dangerous Game

One significant pros whales hold over retail investors is their ability to manipulate the market. With their huge reserves of capital, they can influence price movements in ways that benefit them while “harm” smaller traders. And here one common tactic is stop-loss hunting, where whales intentionally drive prices below key support levels, trigger automatic sell orders and allow them to buy assets at a lower price. 

Another strategy is the “pump and dump” scheme, in which they artificially inflate the prices of low-liquid altcoins, create hype, and then sell off their assets at the peak, leaving unsuspecting investors with devalued assets. In addition, whales often use FUD (fear, uncertainty and doubt) tactics, spreading negative sentiment to trigger panic selling, allowing them to accumulate more assets at a discount. While these strategies benefit large investors, they often result in significant losses for retail traders who may unknowingly buy at inflated prices or panic sell during manipulated downturns.

How to avoid whale manipulation:

• Watch trading volumes. Low liquidity altcoins are more vulnerable to manipulation.

• Avoid emotional trading. Don’t buy into hype or panic sell during market swings.

• Look at whale wallet movements. If large investors are accumulating during dips, it may indicate confidence in long-term growth.

Tip: Don’t try to outplay whales - instead, observe their behavior and use it to make strategic investment decisions.

What Is the Answer

Should we follow the major players in the crypto market? Their actions may influence prices, but are you sure they always point in the right direction for private investors? Well, of course analyzing their transactions can provide useful insights, but do not forget that the whales have other goals, resources and strategies. It is better to use their actions as one decision factor rather than a guide to action.