Large institutions sold $5.5B in BTC since May — and we’re still here

Share This Post

Massive sell-offs from institutions appear to have been the driving force behind the drop in Bitcoin price since May, according to an analyst from Arcane Research.

Since May 10, as much as 236,237 Bitcoin (worth $5.452 billion) has been sold by “large institutions” — mostly as a result of forced selling. 

A Twitter thread from Arcane Research analyst Vetle Lunde details how and when many institutional Bitcoin holders began selling their stacks. Lunde stated that “it all started with Do Kwon.”

The Luna Foundation Guard (LFG), which controlled funds for the Terra project, dumped 80,081 BTC in a failed effort to protect the peg of its native Terra USD (UST) stablecoin in May.

Terra’s collapse appears to have made some Bitcoin (BTC) miners face sell pressure. Lunde estimates that miners sold 19,056 coins between May and June. In some cases, miners were selling more than their monthly production, likely drawing from reserves.

The Luna Foundation Guard (LFG), which controlled funds for the Terra project, dumped 80,081 BTC in a failed effort to protect the peg of its native Terra USD (UST) stablecoin in May.

Terra’s collapse appears to have put pressure on some Bitcoin miners to sell. Lunde estimates that miners sold 19,056 coins between May and June. In some cases, miners were selling more than their monthly production, likely drawing from reserves.

Lunde noted that as miner selling peaked, Elon Musk’s Tesla also hit the red button and sold 29,060 BTC by the end of Q2. At the same time, the Three Arrows Capital (3AC) crypto investment firm was over-leveraged and owed lenders 18,193 BTC and coins equivalent to 22,054 BTC.

Lunde also added that a massive 24,510 BTC redemption took place at the Canadian Purpose Bitcoin exchange-traded fund (ETF) in late June, “creating further fire sale pressure in the market.” That redemption accounted for 51% of that ETF’s holdings.

BTC market growth

Despite the crypto markets seeing tremendous sell pressure from institutions in recent months, the Bitcoin market remains remarkably resilient. 

Trading volumes have also remained higher through the 2022 market downturn compared to the peak of the 2017 bull market. On December 17, 2017, Bitcoin daily trading volume reached a cycle peak of $12 billion, while daily volume in July 2022 has been above $20 billion according to CoinGecko.

CEO of Singapore-based market maker Presto Labs Yongjin Kim agreed with Lunde that liquidations from 3AC and others caused the significant price drop in June, but believes the BTC price will return to $30,000 within the next few months.

He told Cointelegraph on July 21 that “those liquidations pushed Bitcoin price below the fundamental equilibrium price,” leading him to believe that prices will return “to $30,000 in the next few months.”

Related: BTC price battles 200-week moving average after $930M Tesla Bitcoin sale

Kim added that it will take time for retail investors to regain their confidence in crypto after what they endured over the past few months and that institutional investments will rise again.

“I think the retail sentiment is completely broken, so it will take some time before we restore confidence in the market. But there will be some reversal by the end of this year counteracting the liquidations.”

Lunde concluded his thread by stating:

“I tend to lean in favor of forced selling and contagion-related uncertainty being done for now. We will likely slump, pump, and dump in choppy conditions in the coming period.”

Read Entire Article
spot_img
- Advertisement -spot_img

Related Posts

Bitcoin Preparing for a Bullish Weeknd Ahead While the Bears Aim To Slash the Price Below $67,000—What’s Next?

The post Bitcoin Preparing for a Bullish Weeknd Ahead While the Bears Aim To Slash the Price Below $67,000—What’s Next appeared first on Coinpedia Fintech News The Bitcoin price has been facing

Based On Historical Pattern: Dogecoin Is On Track For Over 400% Rally, Analyst Reveals

Dogecoin (DOGE) might be on track for a massive rally as the asset continues its consistent uptick in recent weeks, up by a double-digit percent According to a renowned crypto analyst Javon Marks,

Crypto Bettor ‘Fredi’ Distorts Trump Odds On Polymarket, Researcher Claims

In a story within the decentralized prediction market sphere, a researcher has accused a crypto bettor, operating under the pseudonym ‘Fredi9999’ or simply ‘Fredi,’ of

Digital Ruble and Sanctions: Expert Analyzes Russia’s Digital Currency Plan to Evade Western Control

A Fellow at the Carnegie Russia Eurasia Center and former adviser at the Central Bank of Russia has weighed in on the digital ruble, Russia’s central bank digital currency (CBDC), highlighting

Expert Predicts Massive Upshoot For XRP Price To $5, Shiba Inu Price To $0.0008, ETFSwap Price From $0.03846 To $8

DeFi ecosystem expert has given an eye-opening investment alert that could help you make millions of dollars if you take early action This expert has predicted the ETFSwap (ETFS) price to make a

$230M Bitcoin Heist Takes Dark Turn — $100M Still Missing, FBI Probes Kidnapping Link

Two young men pulled off a $230 million bitcoin heist in one of the largest crypto thefts from a private individual in US history But after indulging in luxury cars and a $2 million watch, the story