How Bitcoin Whales Use Their Holdings Without Selling

Bitcoin whales are some of the most significant figures in the crypto space. These are individuals who own large quantities of BTC, obtaining it via trading, long-term holding, or even mining. Oftentimes, these whales choose to keep their digital assets rather than sell them, yet they’re still able to leverage their worth. Let’s take a look at some of their methods.

What Are Bitcoin Whales and How Do They Influence the Market?

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A Bitcoin whale is somebody who holds a substantial amount of BTC. The amount has changed over time, to reflect asset’s price, although typically it's considered to be a person with at least 1000 BTC. Sometimes, it's also taken as having equal to $10 million USD worth of Bitcoin or more. For context, as of May 2025, 1000 BTC is equal to over $104 million.

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The actual amount is less important compared to how much power these individuals wield. By owning such a significant amount of Bitcoin, they are able to directly influence how the market operates, triggering spikes and dips, and even adding or removing liquidity.

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There's a level of soft power that comes with them, too, in the form of social media representation. There are projects which monitor when whales act and operate, displaying their activity online. The transparent nature of Bitcoin allows this to be easily seen, so long as a whale is moving their BTC around from one wallet. Some people treat this as an indicator of certain future activity, as the idea of a whale moving their holdings around is seen to be meaningful, purely on account of their wealth. To hold a lot of Bitcoin is treated as meaning you understand the market well, and have been a skillful trader, someone who held for a long time, or had enough money to buy into Bitcoin later in its life-cycle.

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That being said, not every Bitcoin whale keeps their BTC in one wallet. In fact, most whales portion off their crypto into various different locations, some being wallets they fully own, others being custodial savings accounts through which they can earn a passive income. In these circumstances, their movements might not be as easy to track by whale-monitoring projects.

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Why Bitcoin Whales Avoid Selling Their BTC Holdings

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It's not uncommon for Bitcoin whales to avoid selling their BTC and hold onto their position. There's several reasons for this, some ideological, others financially motivated. 

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Store of Value: Bitcoin is considered as a strong store of value by many financial analysts, and even some countries. It's consistently beaten fiat inflation rates across the world, and has outperformed gold. Therefore, some whales may treat it as the best method of avoiding the pitfalls of the traditional markets.

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Market Impact: While some Bitcoin whales revel in the idea of manipulating and influencing the market, not everybody wants to have such a significant impact. Not only is market manipulation illegal in many circumstances, but it's also a poor reflection on the crypto industry. Some whales may prefer selling their BTC very slowly, or treating it as a type of reserve instead.

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Slippage Issues: When you sell large amounts of an asset, you can face price-inconsistencies, where the full amount cannot be sold in one lump-sum, due to a lack of buyers ready to match the amount. As a result, exchanges or brokers will sell portions off, as it's easier to find buyers. However, this process often involves new prices being set along the way, meaning not every fraction is treated as equal. As a result, selling sizable amounts of BTC can be discouraging. 

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Taxation Issues: Depending on your country of residence, buying, selling, or even moving BTC can trigger a taxable event. Therefore, it might be smarter for some people to simply hold onto it. 

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Belief in Bitcoin: Many Bitcoin whales got to their position because they believe in Bitcoin's significance and permanence in the economic world. They appreciate the ability to have full autonomy over their finances, they align with Bitcoin's values of providing self-sovereignty, and they struggle to see a future without BTC playing a meaningful role. Their large amounts of BTC is simply a marker of their beliefs. 

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Inability to Sell: Many wallets have been found on the Bitcoin blockchain that would count as being whales - yet their Bitcoin hasn't moved for several years. These are wallets that could either be abandoned, lost, or inaccessible for some other reason. Some dormant whale wallets have suddenly become active after years of inactivity, fueling speculation about whether they were simply long-term holders or wallets previously inaccessible for legal or technical reasons.

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How Bitcoin Whales Use Leverage Without Selling

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Just because a Bitcoin Whale is not selling their assets doesn't mean they're not making use of them. There are methods of leveraging your BTC without trading it in for fiat or another digital asset.

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Passive Income

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Bitcoin whales can earn potential returns on their BTC by locking it away to achieve passive income. There are several custodial services that offer savings accounts, where users can store their assets and earn in the process. 

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Bitcoin Loans

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If Bitcoin whales need access to fiat, but don't want to lose their BTC position, they can always access a crypto loan. This is where they use BTC as collateral to borrow fiat. These are often easily accessible. In most cases, crypto loans from platforms like Ledn do not require credit checks, but users must complete KYC and meet eligibility requirements. To reduce financial risk, they tend to over-collateralize loans, meaning that if somebody defaults, it doesn't damage the lender.

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Ledn currently offer BTC-backed loans with an annual interest rate starting a 10.4%, APR starting at 12.4%, and a loan-to-value ratio of 50%. Let's illustrate this with an example – say you access a Ledn loan with $10 million USD worth of BTC (approximately 96 BTC). For a 12-month term, and with a loan-to-value of 50%, this you would receive $5,062,625.28 USD, as of May, 2025.  

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Crypto-Backed Loans: Borrowing Against Bitcoin Through Centralized Platforms

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Let's zoom in on the process of crypto-backed loans. These are a powerful way of whales making use of their BTC without actually selling it. Rather, they send their money to a centralized service, like Ledn, Nexo, or YouHodler, and borrow fiat in return. 

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Despite Bitcoin being a decentralized asset, the only way to access a loan for it is via centralized means. This is for two reasons – fiat does not function on-chain, and so an intermediary is needed to release it, plus, Bitcoin is not architecturally structured to function with elaborate smart contracts or development ecosystems, like with Ethereum.

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Note that every lender will have slightly different rates, terms, and rules on how their loans function. You must read these carefully, and decide which suits your needs best. Whales have a high-net worth, so they can shop around, and potentially even access some over-the-counter solutions with custom rates.

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However, being a Bitcoin whale also means they need to be especially vigilant when it comes to who they work with, as they're handing over significant sums of Bitcoin to a third-party. They need to be sure of the security protocols and overall safety profile. This is one reason people choose Ledn, as they're not only transparent in their financial activity, posting their proof-of-reserve data and open-book reports, but they've also been awarded a SOC 2 Type 2 certificate, meaning their services are secure, transparent, confidential, private, and accessible.

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Using Wrapped Bitcoin (WBTC) in DeFi Lending Protocols

Naturally, you'll find many Bitcoin whales who are fans of radical decentralization. Sadly, Bitcoin's architecture prevents DeFi services directly integrating with it, but a workaround exists for BTC users who would prefer fully non-custodial experiences.

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While you cannot directly use Bitcoin in a decentralized ecosystem, you can use wrapped-BTC (WBTC) as an alternative. A wrapper is a representation of an original asset, designed to be worth the same as its namesake, but with the increased functionality of being compatible within a certain ecosystem.

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There are wrapped versions of Bitcoin that operate on Ethereum, Solana, Base, Sui, etc. Most wrapped BTC is managed by BitGo, who run these assets, intending to track the value of BTC 1:1, backed by reserves. In this sense, they are designed similarly to stablecoins, but instead of maintaining parity to a fiat asset or precious metal, they maintain parity to BTC. Just as with USDC and USDT, WBTC is kept at its rate via reserves of Bitcoin, where every 1 WBTC is backed by 1 BTC.

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Some Bitcoin whales prefer this system as they get to use an asset that has equal value to BTC, but which functions on decentralized protocols like Aave or Compound, offering savings accounts and loans. However, wrapped Bitcoin is an acquired taste – many people avoid it as it is a separate asset that merely acts as a representation of BTC, rather than the real thing. 

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If you ever run into a wrapped cryptocurrency, it's good practice to treat it as currently having the same value as its namesake, but with the understanding that it might not be as architecturally rich. Not only this, but by using a DeFi service, you open yourself up to smart-contract risks, such as exploits or hacks, which are not uncommon in this sector. A couple of infamous examples include Solana’s Wormhole hack, where $325 million worth of assets were stolen, and Sonne Finance’s hack where around $20 million was extracted. You may gain additional autonomy, but you might lose a level of safety. The best way to avoid pitfalls is to only use protocols with extensive smart contract audits. 

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Institutional Lending and OTC Deals with Bitcoin Collateral

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Bitcoin whales can leverage their wealth to access highly lucrative deals via over-the-counter (OTC) activity. This is where an organization will provide a personalised service, with unique offers tailored to their financial setup. These could be special savings accounts with higher passive returns or loans with lower collateral and higher LTVs.

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Potential risks are generally mitigated with proper due diligence, ensuring they work with reputable and trustworthy organizations. But it's always important to consider the possibility that Bitcoin whales could lose their holdings when working with organizations that custody or control those assets, so working with institutional counterparties requires a high level of trust. 

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Note that these are bespoke services, where the best offers are given to the wealthiest of individuals. This means not every whale will get the same treatment, as some are worth significantly more. Keep in mind that to get the best deals, you'll likely need to act during a bull market, where your BTC will be worth more overall.

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Risks of Using Leverage Without Selling Bitcoin

Bitcoin whales always face some level of risk when trying to leverage their assets without selling. These include:

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Platform Security Risk: the service they use may have security flaws, meaning that their stored BTC could get hacked or exploited by bad actors. You want to avoid services which don't have proper technological audits, as this is a necessity for trusting any particular platform.

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Platform Insolvency Risk: CeFi platforms have been known to become insolvent or file for bankruptcy. You don't want this happening while they hold your BTC, otherwise it could require a lengthy legal process before your digital assets are returned to you. Working exclusively with services that are transparent about their economic workings, and have been externally audited for their reserves is critical.

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Market Volatility: the crypto market is infamously volatile - even though Bitcoin tends to hold its value better than most altcoins, it still fluctuates heavily. If you leverage your BTC by locking it away in a savings account or by securing fiat via a loan, then you could find it worth less when it returns to you, if the markets are unfavourable. Whether this is bothersome or problematic will depend on how expendable your BTC is to you, and how drastically it drops.

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Legal & Compliance Considerations: High-net-worth Bitcoin individuals may be subject to unique reporting obligations, regulatory scrutiny, or limitations based on their jurisdiction. Always consult with a legal or financial advisor when considering custodial or lending strategies involving crypto.

Conclusion

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Bitcoin whales can access unique financial opportunities that allow them to preserve their holdings while gaining liquidity. Whether through crypto-backed loans, yield-bearing platforms, or OTC services, each strategy carries both potential benefits and risks.

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To make the most of this, it's best to look out for reputable companies that offer bespoke options to their High-net worth clients. For instance, Ledn provides private wealth services, with options tailored to each Bitcoin whales’ specific economic situation. If you hold a substantial amount of Bitcoin and are exploring ways to optimize your crypto portfolio, Ledn’s private wealth services offer secure, customizable solutions tailored to your needs.

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Disclaimer

This article is sponsored by 21 Technologies Inc. and/or its subsidiaries (“Ledn”) and is for general information, discussion, or educational purposes only and is not to be construed or relied upon as constituting legal, financial, investment, accounting, tax, estate-planning, or other professional advice or recommendation. Please read Ledn’s full Risk Disclosure Statement and Disclaimers.

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