Bitcoin Whales

David R. Kotok
Thu Nov 18, 2021

We saw this reference in a Bloomberg morning note: “Bitcoin Whales Fuel This Month’s Price Jump, Kraken Report Says,”
Here’s a quote.

"Whale power. Bitcoin whales are accumulating more of the token and powering its rally, a report showed. Holders of 100 Bitcoin or more and a supply shock drove increased network activity, Kraken Intelligence said. The weekly average holdings of whales rose 0.25% since early October to reach a record $724.4 billion. The number of such holders increased 1.6% to 16,156."

We also checked the source (Kraken). Here’s the blog link: “S H O C K T O B E R - Kraken Blog,”


Cumberland Advisors Market Commentary – Bitcoin Whales by David R. Kotok

The idea of a “Bitcoin whale” sounds like a novel entry in the lexicon of cryptocurrency. It isn’t. It reminds this observer of the time that the Hunt Brothers tried to corner the silver market. See “Silver Thursday: How 2 Wealthy Traders Cornered the Market,”
The principle is the same throughout history. Take something that is scarce and plow cash into it to expand holdings faster than the supply is created. Result? Prices rise as demand outpaces supply. Keep flowing more money into the structure, and the price keeps rising.
Until? A liquidation shocks the structure or a credit event weakens it. The latter is where leverage and forced selling cause the reverse reaction to be violent.
Will a Bitcoin ETF based on a Bitcoin futures price be the trigger? We have no way to know. Will Bitcoin whalers follow the historical path of Jay Gould in his attempt to corner the gold market in 1869? We don’t know.
Let me offer three observations:
First, ask 100 investors, “Who was Jay Gould?” My informal tally so far is that 1 out of 100 have some vague recollection of the name. Wikipedia offers a biographical sketch ( along with an account of Black Friday ( ).
Second, during the gold expansion era in history, the excitement over gold versus silver and whether or not gold was the “new money” was a hot topic. (For history buffs, remember that the silver drachma of ancient Athens was the world reserve currency for almost five centuries during the time that human societies evolved around the Mediterranean Sea.)
Third, we do not hold Bitcoin ETFs in Cumberland managed accounts. Here’s a Yahoo Finance discussion for your reference. “It’s BITO vs. GBTC vs. BTC as Bitcoin ETF Wars Heat Up,”
 A final note: when playing musical chairs, it’s important to sit down before the music stops.

David R. Kotok
Chairman and Chief Investment Officer
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