Bitcoin has fallen more than 70% from its all-time high in November 2021 and has triggered selling pressure with it. While it seemed that institutional investors were going to hold through the bear market, this has not been the case. Over the last couple of months, the sale of bitcoin in the open market has ramped up, and institutional investors have been revealed to have sold a large percentage of their holdings.
The sell-offs from the institutional investors have been rocking the market, but due to the sales not being disclosed at the time of the sales, the market did not know these companies were offloading their holdings until much later.
It had started with the collapse of LUNA when the market had seen billions of dollars wiped off the market cap. This had been a big blow to the market, and investors scrambled to get out of the market. During this time, the profitability of the investment of a lot of institutions had plummeted, leading them to offload either to keep their activities going or just to prevent more losses.
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Recent data now shows that these institutional investors had sold off large holdings of BTC. At first, it was thought to be just the bitcoin miners who were to finance their operations. However, much larger, more cashflow positive companies have also been selling their bitcoin.
Instituional investors dump BTC | Source: Arcane Research
Elon Musk’s Tesla had announced that it had sold almost $1 billion worth of BTC. A total of 29,060 BTC was sold by the company, which amounted to 75% of its bitcoin holding, and the sale took place sometime in the last two months.
Others who have sold their coins are the miners. In May alone, the miners sold 4,556 BTC, the first time that miners had sold more bitcoin than they had produced in a month. The next month, June saw even more sell-offs, with miners offloading 14,600 in June, way more than their production capacity.
BTC trending at $21,300 | Source: BTCUSD on TradingView.com
Mostly, the rise in inflation had also gotten to these companies. With individual investors panicking, the selling pressure had grown like wildfire. This has led to a total of 236,237 BTC that has been sold by institutional investors over the course of two months, accounting for 1% of the total supply.
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Nevertheless, the sell-offs have begun to subside. Mostly, as the price of bitcoin has succumbed to the bears, a lot of investors are seeing their portfolio in the red and, rather than selling for a loss, 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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