Bloomberg: Early Bitcoin holders have sold 500,000 BTC in the past year. If institutional inflows stagnate, it may cause a sharp drop

Mars Finance News, on July 4th, according to Bloomberg, despite continuous positive news, Bitcoin's price has failed to break through its current trading range for months. Beneath the surface, long-dormant whales are reducing their positions, while institutional investors are accelerating their purchases. This transformation is gradually shifting Bitcoin's nature from a high-risk speculative asset to a long-term allocation asset. According to 10x Research data, large holders have sold over 500,000 Bitcoins in the past year (valued at over $50 billion at current prices), which is almost equivalent to the total net inflows of the US Bitcoin ETF since its approval and is not far from Michael Saylor and his company's (now named Strategy) accumulation of $65 billion over the past five years. Many sellers can be traced back to Bitcoin's early cycles when prices were far lower than the current level. Some whales are not simply selling but are exchanging tokens for stock-related assets through over-the-counter trades. Parataxis Capital co-founder Edward Chin stated: "What we are seeing is a replacement of underlying positions. A less-discussed driving factor is that whales are transforming their risk exposure by participating in stock-related financing transactions using physical Bitcoin." Despite whale sell-offs, ETFs, corporate treasuries, and other institutions have collectively absorbed nearly 900,000 Bitcoins over the past year. These institutions currently hold about 4.8 million Bitcoins, representing 20% of the circulating supply. However, observers warn that while institutions are bringing stability to cryptocurrencies, they may also become the long-awaited exit channel for whales—if market sentiment reverses, retail and retirement investors may bear the risk. The current primary risk lies in supply-demand imbalance: if whales restart large-scale sell-offs while institutional inflows stall, the market could experience a sharp decline. According to 10x Research data, in 2018 and 2022, just 2% and 9% of capital outflows triggered Bitcoin price drops of 74% and 64%, respectively.