Who is most to blame for the cryptocurrency collapse? Looking for the biggest Bitcoin sellers on the eve
Since 10 May 2022, some 236,237 BTC worth a total of $5.452 billion have been sold by “large entities”. Most of these deals were made because of an urgent need for cryptocurrencies to cover certain losses, i.e. they were forced and coerced. Thus, it was the big market players that have been the main driving force behind the crypto market decline over the past few months. Let’s take a closer look at what is happening.
Note that the current magnitude of the collapse of Bitcoin and the cryptocurrency industry as a whole is more than palpable. Specifically, in the first half of November 2021 BTC reached a historical high of $69K, however, in mid-June 2022 the cryptocurrency updated its local low at $17,622. This can be seen on the four-hour chart.
Four-hour chart of Bitcoin
Naturally, it wasn’t just ordinary retail investors who contributed to the collapse on such a serious scale, but also big professionals. And according to analysts, they have disposed of a huge amount of BTC in recent months.
Who sold all the bitcoins?
Arcane Research analyst Wetle Lunde detailed on Twitter how and when many institutional bitcoin holders started selling their coins. According to him, “it all started with Do Kwon”, the creator of the Terra ecosystem. The Luna Foundation Guard (LFG) organisation, of which he is the founder, sold 80,081 BTC in May in a failed attempt to support the pegging of its native TerraUSD UST stablecoin in the collapse of the entire ecosystem.
Here's a table with information on bitcoin sales by popular companies. The antilyder in this ranking is LUNA, which, as we have noted, tried to save the situation with the cryptocurrency of the same name and the UST stabelcoin.
Major market players and their bitcoin sales
In the end, the collapse of Terra led to a domino effect for the entire industry. Due to the fall in the Bitcoin exchange rate, miners were also forced to sell some of their reserves – 19,056 BTC between May and June. The fact that their reserves have shrunk significantly is confirmed by the fact that miners were selling more coins than they were mining, Cointelegraph reported.
Trend in BTC sales by miners a few months earlier
The situation has only been exacerbated by the recent news of the sale of 75 percent of bitcoins from Tesla’s balance sheet. Also not to be forgotten is the liquidation of the assets of the bankrupt Three Arrows Capital fund, co-founded by Su Zhu. The latter, incidentally, is going through significant difficulties in bankruptcy proceedings.
Most surprisingly, despite significant selling pressure, the crypto market has remained relatively stable in recent weeks. In particular, Bitcoin was able to rise to $23,756 after news of Tesla’s BTC drain was published.
Trading volumes have also remained relatively high – higher than at the peak of the 2017 bull run. All of this could be indicative of the BTC accumulation phase that has arrived. The coins are now simply going from the hands of the losers in the race to those who are ready to wait for the next acemoon, actively accumulating coins.
Read also: Coinbase cryptocurrency exchange employee arrested on insider trading charges. How much did he 'earn'?
The ace often evokes greed – and it was this emotion that was the main topic of discussion during Galaxy Digital’s head of investment firm Mike Novogratz’s speech at the Art+Tech conference. He said that hundreds of X’s of profit in crypto is “not normal” and sometimes crypto-enthusiasts are more like “a bunch of idiots”. Here’s his quote, cited by Decrypt.
I had friends who bought a lot of cryptocurrencies and it changed their lives – guys I grew up with who didn’t make much money but suddenly had a $5 million fortune. I met up with a couple of them again in October, made them look me in the eye and said: “You should sell half or two-thirds of it, it’s not normal to make 200 times your original investment.”
Novogratz’s main message is that any investment is a complex process, and it’s hard to argue with that.
It is very difficult to be a good investor. You need to improve, gain new knowledge, practice and persevere.
Mike Novogratz’s tattoo with LUNA
True, the head of Galaxy Digital himself has fallen into the ruse he is now so actively claiming. Recall that he had previously invested a rather large sum in Terra and even got a tattoo of the project’s theme. As we already know, Terra collapsed. Some time after the collapse of the project, Novogratz said that the tragedy was a big lesson for him. That is to say, at the very least, he is unlikely to get similar tattoos in the future.
We don't think there's anything wrong with this data. First of all, all these events have already taken place, i.e. those wishing to get rid of cryptocurrencies have done so. Secondly, most of the sales were forced, which means we are talking about liquidation of positions. Accordingly, many listed companies did not want to sell their own coins - but exchanges and the market did so instead. And since Bitcoin managed to grow up to $24K after all this, the coin industry must have successfully coped with sellers' pressure and showed tangible strength.
Look for more interesting news in our millionaires cryptochat. There we discuss other important news from the blockchain world.
SUBSCRIBE TO OUR CHANNEL ON TELEGRAM. MORE INTERESTING NEWS HERE.
Related posts
