Institutions sell 1% of the total Bitcoin supply in less than 2 months
Bitcoin has fallen more than 70% from its all-time high in November 2021 and has triggered selling pressure with it. Although it looked like institutional investors were going to stick around through the bear market, this has not been the case. Over the past couple of months, open market bitcoin sales have increased, and institutional investors have been revealed to have sold a large percentage of their holdings.
Institutional investors are offloading Bitcoin
The sales by the institutional investors have shaken the market, but because the sales were not disclosed at the time of the sale, the market did not know that these companies unloaded their holdings until much later.
It had started with the collapse of LUNA when the market had seen billions of dollars wiped off its market value. This had been a huge blow to the market and investors were scrambling to get out of the market. During this time, the profitability of the investments of a number of institutions had plunged, causing them to be relieved either to keep their activities going or simply to prevent further losses.
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Recent data now shows that these institutional investors had sold large holdings of BTC. At first it was thought that only the bitcoin miners would finance the operation. However, much larger, more cash-flow positive companies have also sold bitcoin.
Instituional investors dump BTC | Source: Arcane Research
Elon Musk’s Tesla had announced that it had sold nearly $1 billion worth of BTC. A total of 29,060 BTC was sold by the company, which accounted for 75% of the bitcoin holdings, and the sale took place once in the last two months.
Others who have sold their coins are the miners. In May alone, miners sold 4,556 BTC, the first time miners had sold more bitcoin than they had produced in a month. The following month, June saw even more sales, with miners offloading 14,600 in June, well in excess of their production capacity.
BTC trending at $21,300 | Source: BTCUSD on TradingView.com
For the most part, the increase in inflation had also reached these companies. With individual investors panicking, selling pressure had grown like wildfire. This has led to a total of 236,237 BTC being sold by institutional investors over the course of two months, accounting for 1% of the total supply.
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Nevertheless, sales have begun to decline. For the most part, as the price of bitcoin has succumbed to the bears, many investors are seeing their portfolios in the red and instead of selling for a loss, they have entered an accumulation phase to hold through the bear market.
Featured image from The Conversation, charts from Arcane Research and TradingView.com
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