If you haven’t been living under a rock for the past 2 years, you’re aware of the Bitcoin and cryptocurrency frenzy and enthusiasm by social media, retail investors, corporations, and governments. On April 13th, 2021, Bitcoin peaked its ripping bull trend at just under $65,000 per coin before entering an aggressive selloff. Whether you sold your own holdings, are holding through the selloff, or are sitting on the sidelines, you may be wondering who or who else is selling their cryptocurrency.
To keep this article targeted, we will look specifically at Bitcoin, but in many respects, this information can be attributed to the entire cryptocurrency market.
The crash comes after a series of negative articles and legislation around the cryptocurrency industry ended with China ushering a ban on financial institutions from working with cryptocurrencies and transactions related. These were not China’s first set of restrictions, and come while most world governments are actively monitoring the space.
For well over a year now, investors and people bullish on cryptocurrency technology have actively been moving Bitcoins off of exchanges and into cold storage and other secure, digital wallets. Since May of 2020, nearly 500,000 Bitcoins were moved off of exchanges. This exodus from exchanges creates even more scarcity than already designed into the Bitcoin code. As of May 4th, 2020, over 2.4 million of just over 18.5 million are held on exchanges. Although this increased scarcity, it is still fairly easy to move your coin to exchanges and sell on the open market as people did with nearly 60,000 Bitcoin.
So, who actually sold out and perpetuated the domino effect? Let’s go through some big names one by one.
Paper Hand Neighbors
It shouldn’t come as a surprise that an overly enthusiastic market would eventually flip from net buying to net selling. Humans naturally want to work together but are also very competitive by nature. With so many retail investors piling into a single asset, when sentiment turns from bullish to bearish, many will attempt to exit before the flood of sellers.
According to Glassnode’s on-chain analytics data published on Monday, May 17th, 2021, the vast majority of wallets selling were held by short term holders aged less than 155 days. Their analysis also shows the majority of the market sellers took a realized loss for only the 3rd time in 2021. As of Glassnode’s analysis, “A total of 1.1M addresses have spent all coins they held during this correction, again providing evidence that panic selling is currently underway.”
If you truly believe in the product and the technology playing an important role in the financial industry, as Warren Buffett says, “Be fearful when others are greedy. Be greedy when others are fearful.”
Elon Musk’s Diamond Hands
You can look anywhere on the internet and find negative comments on Elon Musk this week, we will not be participating in that. Elon has been an outspoken supporter of cryptocurrencies and not only owns some Bitcoin personally, he has directed Tesla to purchase and hold over 38,000 coins. According to his most recent tweets, he and Tesla are not planning on selling anytime soon.
Tesla has 💎 🙌
— Elon Musk (@elonmusk) May 19, 2021
— Michael Saylor (@michael_saylor) May 19, 2021
SMH…I’ve seen better from you PFT. Over here we just buy the dip! https://t.co/1iJq0JTUUh
— Tom Brady (@TomBrady) May 19, 2021
Jack Dorsey and Square
#bitcoin changes *everything*…for the better.
And we will forever work to make bitcoin better. https://t.co/wssrF2U0P0
— jack (@jack) May 14, 2021