Bitcoin Whales Exit, Institutions Drive Market Maturity

While many Bitcoin whales “woke up” in the last month to sell their BTC at big profits as it rallied over $122,000, analysts say it is a good sign of a maturing market and doesn’t hurt the value of Bitcoin. 

In an X post on Wednesday, Bitcoin financial services company Swan Bitcoin said the largest rotation in Bitcoin (BTC) history is almost complete as the “old guard are being replaced by new titans with conviction,” such as corporations and treasury firms.

Earlier in the month, a whale from the Satoshi era unloaded their entire stack of 80,201 Bitcoin, worth $9.6 billion, across several transactions. 

At one point, during the transfers, the price dipped 4% as the sale was “digested,” but it didn’t last long, according to Bitcoin researcher Vijay Boyapati.

Meanwhile, market data analytics firm CryptoQuant agreed that the recent Bitcoin sell-off came from new whales realizing gains, causing Bitcoin to fail to hold above the $120,000 mark.

Crypto analyst Willy Woo said in June that whales with more than 10,000 Bitcoin have been steadily selling since 2017, in answer to a question about who has been selling amid heightened interest from institutions.

Whale sales are good for Bitcoin, says hedge fund co-founder

Speaking to Cointelegraph, ZX Squared Capital co-founder and chief investment officer CK Zheng said whales selling off isn’t a negative, because new buyers are jumping in, which shows a “healthy dynamic of a new bull market.” 

Crypto data research platform Santiment said on Thursday that wallets with between 10 and 10,000 Bitcoin bought up another 218,570 coins since late March, adding 0.9% of all coins to their wallets during this time frame.

Bitcoin entities hold almost half a trillion in BTC

Zheng said that institutional players entering the space as the OGs exit is the “natural evolution of the system” and creates a form of order.  

Crypto treasuries, in particular, have proven popular with firms trying to get exposure to Bitcoin. 

There are 219 entities that combined hold 3.6 million Bitcoin, worth over $419 billion, according to Bitbo data. This includes exchange-traded funds, countries, public and private companies, Bitcoin mining companies and DeFi. 

“I think because now you have the corporate treasury, the Bitcoin treasury, which is kind of institutional order, and then the ETF market, they play a different kind of dynamic, more into the Wall Street machine,” Zheng said.

“It’s become a different type of order in the future evolution of the Bitcoin process; it’s a healthy way […] for future growth.” 

However, in the near future, Zheng said Bitcoin price volatility will likely continue until Bitcoin becomes “true digital gold,” which might take a few more cycles of ups and downs. 

Bitcoin whale exit shows market maturity

Ryan McMillin, chief investment officer of Australian crypto investment manager Merkle Tree Capital, told Cointelegraph that Satoshi-era Bitcoin movements represent a slow but clear trend in Bitcoin’s financialization. 

“Bitcoin moving from these old wallets, early adopters, cypherpunks and libertarian techies, to institutions and ETFs is a sign of market maturity and integration with the financial system,” he said.  

It’s similar to when gold got its first exchange-traded products in the early 2000s and the yellow metal rallied for a decade, going from around $350 an ounce to around $2,000 an ounce, according to McMillin. 

“The same process should be expected for Bitcoin, as institutions like pension funds inevitably gain exposure that will set an asset allocation, taking profit as it rises and adding to positions when it falls, further reducing the volatility of that asset and making it more investible to the more conservative investors like insurance companies.” 

Whales might be looking to diversify  

The OG Bitcoin whale sales could also be part of a plan to diversify holdings into other potential high-growth areas such as artificial intelligence, according to Zheng. 

Related: Bitcoin ’tick tock’ fractal predicts $150K BTC price top in October

He said it’s a sign of a healthy market because, overall, assets changing hands don’t change their value.

“It’s no different than if you buy a property. You may be the property’s original owner, but after 10 years or 20 years, if the price appreciates a lot or your situation changes, you may want to change,” Zheng said. 

“You may want to sell your property, take the profit and invest somewhere else, and a new purchaser buys your property. It doesn’t  really change the dynamic of the value of your property.” 

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