Early Bitcoin (BTC) whales are believed to have sold over 500,000 BTC, equating to approximately $50 billion, in the past year. This massive offload has been balanced by institutional investments into U.S. Bitcoin spot exchange-traded funds (ETFs) and corporate treasuries. As Bloomberg recently reported, this back and forth has kept Bitcoin’s price relatively stable, while reducing its volatility, indicating a significant change from a speculative asset to a long-term institutional investment.
The Great Bitcoin Exchange
According to Bloomberg, the amount of BTC sold by early investors over the last year closely matches the inflow into U.S.-based BTC ETFs, suggesting a near perfect exchange. These sellers include miners, offshore funds, and anonymous wallets, many of whom acquired their holdings when Bitcoin was valued in the hundreds. Some are reportedly selling their BTC for stock-linked financing deals, effectively exiting the crypto market through “in-kind” transfers.
On the other hand, institutional investors, spearheaded by the ETFs, Michael Saylor’s MicroStrategy, and numerous corporate followers, are reported to have amassed nearly 900,000 BTC, bringing their collective holdings to 4.8 million BTC. This accounts for about a quarter of the crypto’s 19.8 million circulating supply.
A recent CNBC report revealed that corporate treasuries have been consistently purchasing more Bitcoin than their ETF equivalents for three consecutive quarters. Data from BitcoinTreasuries indicates that MicroStrategy alone holds 597,323 BTC worth over $65 billion, dwarfed by the 848,608 BTC collectively owned by public companies.
Diminishing Volatility
The past year’s Bitcoin sales represent a significant shift in power. Five years ago, a study by Flipside Crypto estimated that a mere 2% of anonymous accounts controlled 95% of Bitcoin. As DRW’s Rob Strebel mentioned to Bloomberg, “Crypto is becoming less of an outlier,” reflecting Bitcoin’s increasing status as a stable, long-term asset.
Deribit’s BTC Volatility Index, which forecasts 30-day forward-looking annualized volatility expectations, has reached its lowest point in two years, potentially making Bitcoin “an attractive retirement asset,” according to Arca CIO Jeff Dorman. In the last 30 days, Bitcoin has shown a 3.5% increase and a slight 1.5% improvement over the past week, outpacing the broader crypto market, which rose 1.4% in that period.
