Now, picture that single mother in Johannesburg, doing everything she can to keep a roof over her family’s head. Every Rand counts. Each jump in the price of a loaf of bread or a kilowatt hour becomes a disaster. Now, picture this: someone spends $39 million on Ethereum. It's a jarring contrast, isn't it? As many of them fight not to perish, a different group is placing titanic wagers in the still-wobbly realm of cryptocurrency. The implication of the question runs deeper than the price of ETH. It shines a light on who’s truly winning when a gigantic creature takes such a huge leap.

Trickle-Down Myth Or Just A Puddle?

Instead, we’re sold on these big investments with the notion that in the end they help everybody. The "trickle-down" theory suggests that the wealth created at the top will eventually flow down to the rest of us. When a whale buys ETH worth $39 million, does that job creation extend to Johannesburg? Will it really enhance access to financial services for unbanked, underbanked and otherwise marginalized communities in Detroit? How does it help create new schools or hospitals in underserved communities?

Let's be realistic. The short answer is probably not directly. You might point to ancillary benefits, like more activity on the Ethereum network. This increase in activity may lead to greater opportunities for developers and validators alike to flourish. The biggest winner, as is often the case, is again, no surprise here, the whale itself.

Now, this isn’t intended as a witch-hunt to go after anyone successfully investing wisely. What it’s really about is challenging the prevailing narrative that these actions are good for society overall. It’s about realizing that the crypto space—like so many other spaces in finance—can deepen the harms of these inequities.

Crypto's Wealth Concentration Problem

The truth is a very few people exercise a wildly outsized share of the crypto space. Underwater Report Graphic via DefiLlama Exclusive on Glassnode data shows that wallet addresses holding 10k ETH or more were accumulating heavily during the recent 25% dip. Together, on just June 21, they accumulated more than $265 million in ETH. This growth in concentration of wealth is a particularly troubling trend. A handful of worriers have the ability to significantly affect spot market prices. This tends to occur at the expense of less affluent, smaller investors.

Think about it: a whale can execute a "buy the dip" strategy with millions of dollars, comfortably weathering the storm. A retail investor may be unable to eat those losses and thus may be forced to sell at a loss. This has the effect of concentrating everyone’s wealth, creating a system that allows the rich to get richer, and the poor…well, they often get forgotten.

  • Whales: Accumulate during dips, control market movement.
  • Retail Investors: Vulnerable to price swings, limited resources.

Inequality is increasing, and hardworking Americans are losing opportunities. In the process, the system becomes increasingly out of touch with what’s actually needed in the real world.

Forgotten Voices In The Digital Gold Rush

We have to listen to the experiences of and hear solutions presented by the people doing the work on the ground to advance financial inclusion and economic justice. What do they have to say about all these colossal new crypto investments? What are their concerns? What alternative solutions do they propose?

I spoke with Sarah, a community organizer in Oakland, California, who runs a non-profit that provides financial literacy training to low-income families. "We see a lot of people getting sucked into crypto schemes, hoping to make a quick buck," she told me. They have no knowledge of the dangers, and before they know it they have lost it all. Meanwhile, the whales are getting richer."

Sarah’s testimony should remind us all that the great crypto revolution has not been felt equally or fairly. In reality, it’s doing the opposite — actively harming some of the most vulnerable members of our society.

We can’t ignore the environmental damage caused by crypto mining, especially proof-of-work systems like Bitcoin. Its energy consumption is staggering, contributing more to climate change, which in turn kills marginalized communities, than any other single building in the US.

More Than Just A Price Bounce

Market analysts such as Sensei might foresee a possible 25% bounceback with ETH price taking off. To the person who can barely afford groceries, that’s an administrative burden. As these analysts stare at upward trendlines and resistance lines, actual people are facing very un-technical difficulties in the real world.

Viewed through the lens of an investor, the whale’s moves would look like a shrewd play, a measured bet with the potential for outsized rewards. We need to ask ourselves: at what cost? Are we really designing a system that serves the interest of the privileged few while costing the majority?

The next time you read about a crypto whale making a big dollar purchase, read past the jumping price action. Look closely at what it’s suggesting is happening in the market! Think about the human impact. Think about who really benefits. Consider what steps we all need to take in order to build a more equitable and just financial system that serves us all. It’s not about demonizing success, it’s about calling for a system whereby success is shared—not hoarded. It’s on us creating a future where that rising tide really does lift all boats, and not just the mega yachts.