Bitcoin Holders and Miners Lead Big Sell-Off

Long-term bitcoin holders and miners have been major sellers of bitcoin over the past two weeks, according to a report by on-chain analysis firm CryptoQuant. The data reveals that large holders, often referred to as whales, offloaded more than $1.2 billion worth of BTC during this period, likely through brokers rather than directly on the open market. CryptoQuant analysts noted, “Traders are still not increasing their Bitcoin holdings and large holders’ (whales) demand growth is still missing strength. Stablecoin liquidity has continued to slow down, growing at the slowest pace since November 2023.”

The reduction in holdings by these traders began when BTC prices surpassed $70,000 in late May, as indicated by declining UTXO (Unspent Transaction Output) age bands. UTXOs, which are created in every Bitcoin transaction, help track buying and selling patterns. A decrease in UTXO age typically signals increased Bitcoin activity and selling, while an increase suggests more holding.

Market observers suggest that Bitcoin miners are increasingly pivoting towards the booming artificial intelligence (AI) sector. This shift is motivated by the need to compensate for the reduced mining rewards by selling their bitcoin rewards. Both AI and Bitcoin mining rely heavily on powerful computing chips, which miners already have in abundance. Lucy Hu, a senior analyst at crypto fund Metalpha, explained via Telegram, “The fall of the mining rewards prompted miners to seek other channels to boost revenue. With AI firms demanding energy-intensive data centers, Bitcoin miners are gradually growing revenue from the sales with AI firms.”

Since June 5, BTC prices have dropped from $71,000 to just over $65,000, driven by a strong dollar, a shift away from riskier assets, and growth in traditional stock indices. During this period, U.S.-listed exchange-traded funds (ETFs) tracking Bitcoin saw net outflows exceeding $600 million last week, marking their worst performance since late April. Bitcoin ETFs experienced another notable outflow on June 18, totaling $152.4 million, marking the fourth consecutive trading day of outflows and a cumulative outflow of $714.4 million.

Among these ETFs, Fidelity’s FBTC ETF saw an $83.1 million outflow, bringing its total net inflow to $9.2 billion. This marked the fourth consecutive trading day of outflows for FBTC, totaling $361.6 million. Bitwise’s BITB ETF recorded a $7.0 million outflow, pushing its total net inflow to $2.0 billion. Meanwhile, BlackRock’s IBIT continued its trend of no outflows.

Grayscale’s GBTC ETF experienced a significant outflow of $62.3 million, its largest since June 11, with total outflows now reaching $18.3 billion. According to Farside data, total inflows for Bitcoin ETFs stand at $14.8 billion.