On Bitcoin, Part 6:

The (mood)swings

Georg C. F. Greve
Published in
5 min readAug 12, 2021


The other sources of criticism for Bitcoin are directed toward its behaviour in the markets and the quirks of its community. And much that criticism is fair, but at closer look does not invalidate Bitcoins promise.

Save the whales?

Any person or organisation holding 1,000 Bitcoin or more is considered a “whale.” Some of these whales are known, such as MicroStrategy, the Grayscale Bitcoin Trust, Tesla, the Winklevoss Twins, Tim Draper, or Barry Silbert. Some are anonymous, but because Bitcoin is a public ledger, we know which addresses hold the most Bitcoin, and that the number of whales is going down overall. Some of these whales are fortune seekers who came into Bitcoin boldly and early. But increasingly, large Bitcoin holdings are moving into the direction of professional institutions.

All whales have a lot of experience in how markets work, including how to manipulate them. Bitcoin is still early, and small enough for them to have a major impact, making it an ideal playing field for those who have both knowledge and power to move the market. Much of today’s infamous volatility in Bitcoin is a result of their strategies at play.

But whales also are not interested in destroying the market they profit from, nor do most of them invest emotionally. So while at times they work together, and sometimes they collide, they all share a motive of increasing their own profits. How does volatility serve that goal? Just as it is in the ocean, the answer is shrimp.

Shrimp is what the smallest of traders are called, typically holding less than 1 BTC. Both shrimp and crabs — those who hold up to 10 BTC — are typically not financial market experts or experienced traders. Many of them are pulled into the ecosystem by dreams of quick riches and once they see their holdings go up often end up considering themselves more competent than they actually are. So they seek to accelerate their path to success by using leverage and futures.

The problem is that whales keep a close eye on the futures and will identify the moments when the smaller traders are overexposed. Bumping the price up or down enough will cause a cascade of options being liquidated, accelerating the price up or down. Since the whales cause the cascade, they are prepared for it and take full advantage at the expense of the shrimps and crabs.

The answer for anyone who is not a professional is simple, and well known: Do not use leverage. Regularly buy small amounts of Bitcoin, preferably when the price is dipping, and stay patient.

Instead, many people are looking for quick riches, especially when it comes to so-called “altcoins”, many of which are open “pump and dump” schemes, such as meme coins, where the small investors are usually left holding the bag, losing most, or all of their money.

These altcoins typically seek to associate themselves with Bitcoin, but really have almost nothing in common with it. The benefits or intrinsic values outlined in the previous parts for the most part do not apply to any of them. While some may have their own use cases and ideas, these ideas will have to succeed or fail on their own.

And volatility is not just an attribute of Bitcoin, some stocks can have similarly aggressive up- and downtrends. Most Germans are still sore from the pump and dump scheme that was the German “T-Aktie” — shares in Germanys former telephone monopoly company — where millions of Germans were encouraged using TV advertisement to purchase shares.

So none of this is specific to Bitcoin, really. And the “altcoin casino” is basically a classic case of misattribution.With growing adoption the swings in Bitcoin are expected to get lower, and happen at a much higher base line. As Bitcoin grows, the whales will continue to gradually lose influence.

So is there risk in Bitcoin? Of course, as with almost anything. Does that mean holding Bitcoin isn’t for everyone? Perhaps, but ultimately that’s a question everyone will need to answer for themselves.

Crypto Twitter

Which leaves the criticism of the vocal Bitcoin community on Twitter. It’s often described as toxic, aggressive, brash and annoying. The insider jokes and memes are brewing all the time, and people scream at each other to HODL and BTFD. If someone continues to “not get it” the standard response is HFSP.

All of this is true. And it is easy to see how it would turn some people off. But does it invalidate the value of Bitcoin? Does it undo any of the advantages? Does it disprove any of the analysis that led to the creation and adoption of Bitcoin, and the growth of the community?

There is another community that had and continues to have its fair share of rather toxic people. Of people who are entirely inappropriate, sometimes creepy, leery, sleazy, very full of themselves and utterly insufferable. That community is the software freedom community. Did these people invalidate the benefits of software freedom?

Any community that is truly disruptive will always have its fair share of oddballs. As the community matures, these people will gradually lose influence. They will be relegated to the sidelines as the codes of conduct get established and enforced. It is happening to the software freedom community, and it will happen to Bitcoin.

In the meantime, the “us against them” bonding over Twitter serves an important purpose. It unites a community that aims to radically disrupt a whole range of industries and gatekeepers and finds itself under constant attack by an establishment that is concerned about its privileges. Software freedom had its own experiences with these kinds of attacks. And just like Bitcoin community today, back then we often quoted Mahatma Gandhi:

First they ignore you, then they ridicule you, then they fight you, and then you win.

This article is part six of a series of six articles exploring my personal take on Bitcoin, including its relevance, technical properties, environmental impact, social relevance and significance for software freedom. Articles will be published every couple of days. Here is a list of what has been published so far:

Look out for the wrap up next week.



Georg C. F. Greve

Chairman and Head of Product @VereignAG. Founding president FSFE. Software developer, physicist, author. Loves self-sovereign, open technologies and ice hockey.