What is a Minnow?

In the realm of cryptocurrency, the term "minnow" is a term that refers to individuals with a small amount of investment. 

In English vocabulary, "minnow" traditionally indicates a small fish or entity considered insignificant.

Analogy with Fish

Applying this analogy to the cryptocurrency domain, a minnow describes an individual who has relatively small holdings in a digital asset. As a result, their buying and selling activities are not likely to significantly influence market dynamics.

Difference between Minnow vs Whale

If minnows are small fish that still have a small amount of assets, then they are different from whales. The term “whales” identifies individuals or institutions that control significant amounts of cryptocurrency assets, such as Bitcoin.

Their actions, especially large sales, have the potential to significantly influence observed market prices on exchanges.

Minnow's Impact on Crypto Markets

Despite their small stature, minnows can sometimes have quite a big impact.

Some altcoins exhibit very low trading volumes and insufficient liquidity, making them susceptible to drastic price fluctuations even with simple transactions.

Estimating Minnow Status

There is no precise threshold that limits how large a cryptocurrency investment someone needs to be to be classified as a minnow. 

However, empirical data shows that the majority of investors fall into this category.

Bitcoin Ownership Patterns

Although most addresses in the Bitcoin blockchain own less than 0.1 BTC individually, collectively, they own just 1% of the total BTC supply currently in circulation.

Also Read

What is Altcoin Trader?

What are Market Makers and Market Takers?

What is Market Cap?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change randomly