Massive Outflow Of Capital From Bitcoin: Institutions Sell 236K BTC Since May

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KEY POINTS

  • Tesla sold Bitcoin at a very small loss, claims Arcane Research analyst Vetle Lunde
  • Most of the 236,237 Bitcoins that sold were related to forced selling
  • Lunde claims that BTC miners sold 4,456 BTC in May and 14,600 in June

Major institutions have sold their Bitcoin (BTC) holdings since the collapse of the Terra ecosystem in May, an analyst at Arcane Research – a crypto and blockchain on-chain analysis and news platform – claimed. 

Analyst Vetle Lunde also estimated in a Twitter thread last week that Tesla, headed by Elon Musk, a known crypto entity, sold 29,060 BTC at an average price of $32,209 in May. During this interval, the leading cryptocurrency dropped to a monthly low of $27,700 from a monthly high of $40,023, according to CoinMarketCap data.

“Tesla’s new break-even price of BTC was approximately $33,325, meaning that Tesla sold at a slight loss,” Lunde stated.

“Most of the selling is related to forced selling, and some is not,” Lunde said, adding: “The 236,237 BTC number is derived from massive institutional blow-ups and other large known selling seen in the last two months. The number does not account for other natural capitulation and hedging activity that usually occurs during crypto bear markets.”

In the following Twitter posts, Lunde explained that the market sell-off started with the collapse of LUNA-UST and Luna Foundation Guard selling their Bitcoin reserves. 

“Luna collapsed, leading to contagion and more sell-side pressure,” he said. 

The research analyst said that Bitcoin miners were also pressured to sell their Bitcoins due to the bearish trend setting in the market. These miners sold 4,456 BTC in May, Lunde claimed. 

On the other hand, following the liquidation of crypto hedge fund Three Arrows Capital, crypto lending firm Celsius halting withdrawals and rising inflation levels, Lunde said that the miners sold an additional 14,600 BTC in June.

Talking about the short-term Bitcoin (BTC) movement, Lunde said that macroeconomic conditions will drive the crypto market as well. 

“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,” he added. 

Representation of the virtual currency Bitcoin is seen on a motherboard in this picture illustration taken April 24, 2020. Photo: Reuters / Dado Ruvic