As a result, “large institutions” have sold as many as 236,237 Bitcoins (worth $5.452 Billion) since May 10.
Vetle Lunde, an Arcane Research analyst, shares his Twitter account. It details when and how many institutional Bitcoin holders started selling their stacks. Lunde said that it all began with Do Kwon.
Luna Foundation Guard (LFG), who controlled the Terra project’s funds, dumped 80081 BTC in a failed attempt to protect Terra USD (UST) stablecoin.
Some Bitcoin (BTC), miners may have felt the pinch of selling after Terra’s collapse. Lunde estimates that miners sold 19,056 bitcoins between May and June. Miners sometimes sold more coins than they produced each month, which is likely due to drawing from reserves.
Luna Foundation Guard (LFG), who controlled the Terra project’s funds, dumped 80081 BTC in a failed attempt to protect Terra USD (UST), stablecoin peg in May.
Some Bitcoin miners were forced to sell after Terra’s collapse. Lunde estimates that miners sold 19,056 bitcoins between May and June. Miners sometimes sold more coins than they produced each month, which is likely due to drawing from reserves.
Lunde pointed out that Elon Musk’s Tesla sold 29,060 BTC in Q2 as miners selling peaked. The Three Arrows Capital (3AC), a crypto investment firm, was also over-leveraged. It owed creditors 18,193 BTC as well as coins equivalent to 22,054 BTC.
Lunde added that a huge 24,510 BTC redemption occurred at the Canadian Purpose bitcoin exchange-traded funds (ETF), in June. This redemption accounted 51% of the ETF’s holdings.
BTC market growth
Despite intense sell pressure from institutions over the last few months, the Bitcoin market is still remarkably resilient.
The 2022 market crash has seen trading volumes drop by a lot compared to 2017, when they were at their highest. According to CoinGecko, the peak Bitcoin daily trading volume was $12 billion on December 17, 2017. The daily volume for July 2022 reached $20 billion.
Yongjin Kim, CEO of Presto Labs, a Singapore-based market maker, agreed with Lunde about liquidations from 3AC. He believes that the BTC price should return to $30,000 in the next few months.
On July 21, he told Cointelegraph that liquidations had “pushed Bitcoin prices below the fundamental equilibrium price,” which led him to believe that prices would return “to $30,000 within the next few months.”
Related: BTC price fights 200-week moving mean after Tesla Bitcoin sale of $930M
Kim stated that retail investors will need to rebuild their trust in crypto, following the events of the past months. Institutional investments will also take time.
“I believe the retail sentiment has been completely damaged. It will take time before we can restore confidence in this market. However, there will be some reversal before the year ends to counteract the liquidations.
Lunde ended his thread with the following statement:
“I favor forced selling and contagion related uncertainty being done for the moment.” In the next period, we will likely see choppy conditions as we slump, pump and dump.”
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.