Bitcoin’s Major Power Shift: Large Holders Sell 500,000 Coins

A subtle change in authority is reshaping the $2.1 trillion Bitcoin market.

A consistent wave of sales from long-established whales – including miners, offshore funds, and anonymous wallets – is being counterbalanced almost precisely by demand from institutional investors like ETFs, corporations, and asset managers. The result: Bitcoin is struggling to break through its peak of approximately $110,000, volatility is decreasing, and its position in the investment ecosystem is shifting.

In spite of a series of encouraging headlines – from corporate treasuries embracing Bitcoin to former President Trump’s strong crypto backing – the foremost digital currency has remained trapped within its trading range for several months. Underneath this surface, previously dormant whales are trimming their positions as institutions ramp up their buying efforts. This shift is gradually transforming Bitcoin’s nature from a high-risk asset to a more stabilizing component of portfolios.

Over the past year, significant holders, or Bitcoin whales, have offloaded more than 500,000 Bitcoin – valued at over $50 billion at current prices – as reported by 10x Research. This figure roughly matches the net inflows into successful U.S. exchange-traded funds since their inception and is nearing the $65 billion amassed over the last five years by crypto treasury pioneer Michael Saylor and his firm, now known as Strategy.

Many of these whales date back to Bitcoin’s early days, when prices were significantly lower. In some cases, whales are not just selling; they are swapping tokens for stock market-related deals, circumventing traditional market transactions.

“What we’re seeing is a shift in the base,” said Edward Chin, co-founder of Parataxis Capital. “A less talked-about reason behind this shift and the uptick in network activity appears to be whales converting their BTC into equity exposure via direct contributions of BTC into financing deals linked to public markets.”

Institutions – which include ETFs and Saylor’s Strategy, among many corporate adopters – now control about a quarter of all Bitcoin in circulation. Back in 2020, Flipside Crypto’s research indicated that roughly 2% of the anonymous ownership accounts recognizable on the cryptocurrency’s blockchain held 95% of the digital asset. The balance of power is shifting rapidly.

“Crypto is becoming less of an anomaly and is increasingly recognized as a legitimate asset class,” remarked Rob Strebel, head of relationship management at trading firm DRW, which includes the crypto-focused subsidiary Cumberland. “With this transformation, we expect a reduction in volatility.”

This decline in volatility appears to be occurring, diminishing one of Bitcoin’s most attractive characteristics for many traders. A widely observed metric of price fluctuations has fallen to its lowest level in almost two years, according to Deribit’s BTC Volatility Index, which tracks the 30-day forward-looking annualized projections of volatility.

While whales are decreasing their exposure, ETFs, treasury firms, and other institutions together have absorbed nearly 900,000 coins over the last year, according to 10x Research. These entities now own about 4.8 million coins out of an estimated 20 million Bitcoin in circulation.

However, even as institutions confer stability and credibility to this asset class, some analysts warn that they also create the long-desired exit strategy for whales, raising fears that retail and retirement investors may face losses if crypto sentiment declines.

“The longstanding aim has been to make Bitcoin an attractive asset for institutional investors to provide exit liquidity on a large scale so whales could cash out,” noted Hilary Allen, a law professor at American University’s Washington College of Law, who is a longtime skeptic of crypto.

After two consecutive years of price increases exceeding double, Bitcoin continues to linger near levels seen at the start of the year, despite President Trump’s pro-crypto policies.

Some analysts now project that Bitcoin’s annual growth will be limited to between 10% and 20%. This marks a significant decline from the nearly 1,400% surge of 2017 that thrust the token into mainstream consciousness.

“Bitcoin may evolve into a dull dividend stock over time,” stated Jeff Dorman, chief investment officer at Arca. “On average, it appreciates each year, albeit by smaller increments. It will become a more enticing retirement asset.”

Nevertheless, the overall landscape remains incomplete. Not all whale actions are visible, and Bitcoin could experience volatility again, especially with the emergence of a new market catalyst.

Regardless, a major concern at this stage is an imbalance: If Bitcoin whales begin to sell off substantially while institutional inflows stagnate, the market might face sharp declines. Outflows of just 2% in 2018 and 9% in 2022 caused Bitcoin price drops of 74% and 64%, respectively, as noted by 10x Research.

“We are reaching a point where the market may be nearing its peak,” observed Fred Thiel, CEO of Bitcoin miner MARA Holdings Inc, which has yet to liquidate any of its Bitcoin assets. “However, I believe we are witnessing a very different market dynamic today.”

Ultimately, the transition from anonymous whales to institutional allocators may help sustain the current market dynamics for an extended duration.

“This could last for a long time – years,” commented Markus Thielen, CEO of 10x Research. “It’s more of a slow, gradual evolution where Bitcoin transforms into a 10%-20% asset. The fundamental character of Bitcoin is changing.”

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