Bitcoin Veterans are cashing out, and this move could significantly impact the cryptocurrency market. As Bitcoin’s price falls from its peak, the actions of long-term holders are drawing attention. With Bitcoin dropping over 30% from its all-time high of $126,000 to around $85,500, the market is witnessing increased volatility due to thinning liquidity.
Impact of Bitcoin Veterans Cashing Out
According to noted gold investor Peter Schiff, Bitcoin is experiencing its “IPO moment.” When experienced holders become sellers, the market supply surges, potentially leading to deeper selloffs in the future. Schiff emphasizes that the transition of Bitcoin from strong hands to weak ones not only boosts the available float but also suggests that upcoming selloffs might intensify.
Schiff’s perspective has been echoed by bearish analysts over the years, but now it coincides with significant on-chain activities and large ETF outflows. Traders observe that when confident, long-term holders start trimming their positions near market peaks, a collective sell-off can result in dramatic price fluctuations.
Whale Movements and Major Sales
Recent reports indicate that during October, whales and early Bitcoin wallets moved over 400,000 BTC, contributing to substantial selling pressure. Owen Gunden, an early investor, reportedly liquidated his entire 11,000 BTC holdings during October and November. Similarly, renowned retail investor Robert Kiyosaki sold Bitcoin worth approximately $2.25 million, sharing that he initially bought at around $6,000 and sold near $90,000, intending to reinvest the proceeds into income-generating businesses.
ETF Flows and Retail Sentiment
Analysts at Bitfinex highlight two primary factors for the recent price drop: sales by long-term holders and leveraged liquidations in derivatives markets. When margin positions unwind, prices may decline further before stabilizing. Bloomberg data reveals that investors withdrew nearly $1 billion from Bitcoin ETFs in a single session, marking the second-largest daily outflow among 12 funds. BlackRock’s IBIT led with $355 million in withdrawals, while Grayscale’s GBTC and Fidelity’s FBTC witnessed around $200 million each.
Despite these outflows, there was a notable reversal, with ETFs recording $238 million in inflows recently, illustrating the market’s unpredictable nature. Schiff’s warning underscores Bitcoin’s vulnerability when major holders decide to sell. Even with institutional purchases, transferring coins from long-term holders to casual investors could result in more severe and rapid future price declines.
Market observers will likely focus closely on the actions of these veteran holders, as their decisions might dictate the severity of the next potential market downturn.
