Understanding the Term “Minnow”
In the English language, the term “minnow” can have two meanings.
Firstly, it can refer to a small fish.
Secondly, it can be used metaphorically to describe a person or organization that is considered small or insignificant.
Small Holders with Limited Market Impact
In the context of cryptocurrencies, the term “minnow” describes individuals or entities holding a relatively small amount of digital assets.
When minnows buy or sell their cryptocurrencies, their transactions are unlikely to impact the overall market significantly.
This is in contrast to “whales,” which refers to a small number of individuals or institutions who hold substantial amounts of cryptocurrencies like Bitcoin.
When whales make large-scale transactions, they have the potential to influence the spot prices observed on exchanges.
Small Investors with Potential Impact
However, it’s worth noting that even minnows can occasionally have a notable impact.
Some lesser-known altcoins have low trading volumes and limited liquidity, which means that even a modest sale can cause significant price fluctuations.
There isn’t a specific threshold that defines how much crypto investment qualifies someone as a minnow.
Research suggests that the majority of investors fall into this category.