Bitcoin Long-Term Holders Cash Out
Bitcoin long-term holders are cashing out as the leading digital asset resurges above $50,000 for the first time since December 2021. Many long-term holders transacted their coins in response to the launch of several Bitcoin spot ETFs in January. This caused a slide in the number of Bitcoin held by long-term holders, with roughly 299,500 BTC being spent or moved in the past three months. Additionally, there has been a tsunami of outflows from the Grayscale Bitcoin Trust (GBTC) since it converted into an ETF. However, the selling pressure has been offset by more than $10 billion flowing into newer Bitcoin ETFs launched by BlackRock, Fidelity, and others.
Is Grayscale’s Selling Over?
Less than 13% of the total supply of Bitcoin is still at a loss at current prices, representing long-term holders who bought in at the 2021 bull market peak. Short-term holders experienced losses during last month’s pullback to $38,000, but this was considered a “garden variety” correction that does not indicate major declines in Bitcoin’s price. The worst of Grayscale’s selloff seems to be over, with the firm posting lower outflows in recent trading days. On the other hand, net flows to ETFs have been increasing, with BlackRock’s ETF surpassing Grayscale in terms of trading volume.
Conclusion
Bitcoin long-term holders have been cashing out their coins recently, causing a decrease in the number of BTC held by these investors. The launch of Bitcoin spot ETFs and the conversion of Grayscale Bitcoin Trust into an ETF contributed to this trend. However, the selling pressure has been balanced by significant inflows into newer Bitcoin ETFs. While some short-term holders experienced losses during a recent pullback, it is not indicative of major declines in Bitcoin’s price. Overall, the market remains resilient, with support forming during uptrends. The worst of Grayscale’s selloff appears to be over, and trading volume for newer Bitcoin ETFs is increasing.
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