Crypto is awash with users from all walks of life. Likewise, user wealth varies widely, from newcomer shrimp with entry-level portfolios to 8-figure OG Bitcoiner wallets and crypto whales.
But what do whales do with their wealth, and can you do that too?
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New Opportunities in Crypto
Crypto whales are users who reside at the upper echelon of the wealth distribution. They have more liquidity (money) to spread around and are therefore more keen on seeking low-risk options such as holding, lending or yield farming. But in reality, those options are also available to anyone with any amount of Bitcoin, Litecoin or other cryptocurrencies.
The 1.3 trillion crypto sector is more than Bitcoin and Ethereum, and the quite reasonable expectation of price gains for the top cryptocurrencies. Whales know this more than most, and they actively diversify their portfolio within crypto in order to maximise returns on their liquidity. Whether it is high-risk, often meaningless and hype-driven NFTs (which some might call junk), staking assets, lending (both centralised and decentralised), borrowing, utilising stablecoins or other cryptos for liquidity pools, there are various avenues for users to take a diversified approach.
A Twitter thread analysing the ten largest wallets on DeBank (a DeFi portoflio tracker) highlights how whales approach these various opportunities. While non-fungible tokens are found in almost every portfolio, which some might argue is merely a lottery ticket, there is also an interest in low-risk-yield generation options. One benefit to this is the modest increase in risk (via counter-party risk), which opens the door to yielding crypto instruments traditional finance can only ever dream of.
When crypto whales show an overt interest in such strategies, it’s impossible to not take notice, especially since this activity is on a public ledger. Regardless, these opportunities are not restricted to so-called regulated financial advisors. Unlike in traditional finance, gate-keepers are replaced with individual financial responsibility. The user gets to decide. As such, anyone holding crypto can access the same relatively low-risk revenue-generating opportunities as a crypto whale. More importantly, this can be done through crypto applications which offer these opportunities.
That said, the outspoken appreciation for stablecoins like USD Tether and USDC from whales is not a coincidence. These titans are a major tailwind for the industry’s growth, which will continue to exist despite the booms and busts, the latter of which we just witnessed. In short low-yield opportunities are arguably a favourable option to trading, and sometimes even investing or simply ‘hodling’.
Accessing Crypto Products
Wallets holding 10-figures that engage in staking, borrowing stablecoins, yield-generating opportunities, lending or entering liquidity pools tend to have strong prospects for returns for at least one strategy. These products are easily accessible and do not require a lot of technical knowledge to access. Nor do they require high-risk assets as they are accessible using blue-chip cryptocurrencies and stablecoins such as Bitcoin, Ethereum, USDT, USDC and dare I say Litecoin and other established cryptocurrencies.
Novice friendly platforms like Blockfi, Swissborg and Crypto.com have made it relatively easier to put one’s crypto to work. And indeed, buying supported assets and various passive yield-generating options are available for both novice and experienced users, the latter of which may opt for a C-DeFi approach offered by Bitfinex.
Platforms vary in terms of crypto products and opportunities, but hundreds of thousands of users have begun to dip their toes in the DeFi sector. The recent implosion of the insolvent UST stablecoin (not to be confused with USDT) has forced an industry-wide haircut. But such an event comes and goes, and is ultimately part of capital markets operating freely.
The latest data from DeFi Pulse indicates that the total value locked in the space now stands at a mere $56 billion – a figure last seen in March 2021.
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