Bloomberg: Early Bitcoin holders have sold 500000 BTC in the past year, if institutional inflows stagnate or trigger a sharp drop

On July 4th, according to Bloomberg, despite continuous positive news, the price of Bitcoin has not been able to break through the current trading range for several months. Under the surface, long dormant whales are reducing their holdings, while institutional investors are accelerating their buying. This transformation is gradually shifting the attributes of Bitcoin from a high-risk speculative target to a long-term asset allocation. According to 10x Research data, large holders have sold over 500000 bitcoins (worth over $50 billion at current prices) in the past year, which is almost equivalent to the total net inflow of Bitcoin ETFs since their approval in the United States, and is not far from the accumulation of $65 billion by cryptocurrency pioneer Michael Thaler and his company (now known as Strategy) over the past five years. Many sellers can be traced back to the early cycle of Bitcoin, when the price was much lower than the current level. Some whales do not simply sell, but exchange their tokens for stock related assets through over-the-counter trading. Edward Chin, co-founder of Parataxis Capital, said, "What we are seeing is the displacement of underlying positions, and a less noticed driving factor is that whales are using Bitcoin physical investment to participate in stock market related financing transactions to convert their risk exposure Despite Whales reducing their holdings, institutions such as ETFs and corporate treasuries have collectively absorbed nearly 900000 bitcoins in the past year. These institutions currently hold approximately 4.8 million pieces, accounting for 20% of the flux. But observers warn that while institutions bring stability to cryptocurrencies, they may also become the long-awaited exit channel for whales - if market sentiment reverses, retail and retired investors may take risks. The main risk currently lies in the supply-demand imbalance: if whales resume large-scale selling and institutional inflows stagnate, the market may experience a sharp decline. According to 10x Research, in 2018 and 2022, only 2% and 9% of capital outflows caused a 74% and 64% drop in Bitcoin prices, respectively.