Bitcoin has dropped more than 70% from its all-time high in November 2021, triggering selling pressure. While it appeared that institutional investors would ride out the bad market, this has not been the case. Over the previous few months, the open market selling of bitcoin has increased, and institutional investors have been discovered to have sold a considerable portion of their holdings.
Institutional investor sell-offs have rocked the market, but because the sales were not reported then, the market did not know these businesses were dumping their holdings until much later.
It all began with the collapse of LUNA, which resulted in the market losing billions of dollars. This was a huge blow to the market, and investors scrambled to get out. During this time, the profitability of many institutions’ investments had fallen, forcing them to offload either to keep their operations running or to avoid more losses.
According to recent data, these institutional investors have sold huge amounts of BTC. Initially, it was assumed that only bitcoin miners would be able to fund their operations. However, far larger, cashflow-positive corporations have also sold their bitcoin.
Tesla, owned by Elon Musk, announced the sale of nearly $1 billion in Bitcoin. The corporation sold 29,060 BTC, accounting for 75% of its bitcoin holdings, and the transaction occurred during the last two months. Miners are among those who have sold their coins. Miners sold 4,556 BTC in May alone, marking the first time that miners sold more bitcoin than they produced in a month. The following month, June, witnessed even greater sell-offs, with miners dumping 14,600 units, far exceeding their manufacturing capability.
The surge in inflation had mostly affected these businesses. Individual investors were terrified, and the selling pressure was spreading like wildfire. This has led to a total of 236,237 BTC being sold by institutional investors in less than two months, accounting for 1% of the total supply.
Nonetheless, the sell-offs have started to slow. As the price of bitcoin has fallen, many investors are seeing their portfolios in the red and, rather than selling for a loss, have entered an accumulation phase to ride out the bear market.
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