A recent study confirms that whales are the dominant players in XRP, as just 66 wallets account for about 19% of all XRP tokens. On the other hand, more than 93% of wallets hold less than 5,000 tokens, indicating that whales have highly concentrated their assets.
Understanding Whale Domination in the XRP Market
Based on recent statistics from Cheeky Crypto, a few whale investors have a strong grip on XRP tokens because they hold an enormous share of the overall supply. In fact, just 66 of them possess around 19 percent of all the XRP tokens available. On the other hand, over 93 percent of XRP wallets contain less than 5,000 tokens. As a result, it appears that a few whale investors have significant control over the coin, while most people are only holding small quantities of it.
In addition, it must be mentioned that this information does not tell the entire story. According to the host of Cheeky Crypto, some of the largest wallets could actually be owned by institutional entities or centralized exchanges, so one must consider that the number of independent whale investors may be overstated if the count includes other types of holdings.
Shifting Whale Activity and Its Market Impact
Additionally, Cheeky Crypto has identified a decrease in the number of large XRP transactions. According to their analysis, the number of million-dollar XRP transactions has dropped to just 3%. This suggests that there may be a decline in whale activity or that they are changing their trading behavior.
It should be noted that the consequences of such changes can be significant. When whales stop trading, it leads to a drop in market liquidity. This is quite risky, as lower liquidity can cause major price fluctuations, and a limited supply can mean that small changes in supply will impact the price significantly as well.
Why Wallet Balances Aren’t the Full Story
Though it is clear that whales control a large portion of the XRP supply through their wallets, Cheeky Crypto’s presenter asserted that it is not enough to just look at wallet balances when analyzing market influence. What is needed is a comprehensive analysis of the available information regarding token locations, storage sites, and transfer volumes.
When whales keep large volumes of XRP tokens with major exchanges, it becomes very easy for them to sell quickly in case of sudden price drops, thereby increasing the number of volatile transactions. On the other hand, any XRP holdings kept in inactive wallets will not have an immediate impact. Thus, tracking whale behavior requires careful consideration of trade frequencies, wallet movements, and trading volumes, in addition to wallet balances.
Source — Cheeky Crypto: https://www.youtube.com/watch?v=qX58Jkub4tY