Fidelity Reveals Who's Selling Bitcoin
Chris Kuiper, VP of research at Fidelity's digital asset division, highlights that long-term Bitcoin holders are selling gradually due to frustration over the absence of a significant rally expected in October or November. These holders are making year-end positional changes to secure profits. Despite this, institutional investors, ETFs, and corporations are buying Bitcoin, providing market support. Bloomberg reported over $500 million in Bitcoin ETF inflows recently. Analyst Samson Mow attributes some of the sell-offs to new Bitcoin investors reacting to reports of veteran holders selling their assets.
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Long-term Bitcoin Holders and Their Selling Behavior
Chris Kuiper, vice president of research at Fidelity's digital asset arm, explained that long-term holders who have kept their coins for a year or more are believed to be the main source of selling. However, based on the data cited by Kuiper, these holders are currently selling gradually over time, meaning that there is no rush to exit the market.
Frustration Among Long-term Investors
As noted by Kuiper, many long-term investors were expecting a massive rally for Bitcoin in October or November due to its historical price performance. Unfortunately, this rally did not happen, leading to frustration amongst these investors. Consequently, some long-term holders have been tempted to sell their coins earlier to lock in profits.
Year-End Tax and Positional Changes
Kuiper pointed out that as October's strong seasonal pattern failed to materialize and the calendar year approaches its end, long-term holders are making moves for tax optimization and positional adjustments. Many are choosing to cash out with their current gains to finalize their financial year.
Bitcoin's Divergence: Fundamentals vs. Price
Despite Bitcoin's positive fundamental developments, the cryptocurrency’s lackluster price action continues to diverge, according to Kuiper. This disconnect has fueled mixed sentiments among market participants.
Institutional Buying Supports Bitcoin
Meanwhile, there is significant buying activity from institutional investors, exchange-traded funds (ETFs), and corporations, which helps to keep Bitcoin afloat. Bloomberg's Eric Balchunas reported that Bitcoin ETFs attracted more than $500 million in inflows on Wednesday, showcasing continued demand from larger financial entities.
Blame on Recent Buyers
Samson Mow recently criticized new Bitcoin buyers for selling their assets to secure modest returns after the cryptocurrency underperformed earlier in the year. He also claimed that such behavior was exacerbated by rumors of "OGs" (original holders) dumping their holdings.