Recently, Vetle Lunde, an analyst at Arcane Research, took to Twitter shared how many institutional bitcoin (BTC) investors have sold their position since the crash of LUNA. Lunde points out that the crash of LUNA, which saw Do Kwon sell more than 80,000 BTC, has forced all institutional investors to sell their coins as well.
Large parties must sell bitcoin
Since then, the industry has been booming. In total, more than 230,000 BTC has been sold by institutional parties. Lunde stated:
“the number does not account for other natural capitulation and hedging activities that commonly occur during crypto bear markets.”
A good example of an institutional party that has sold its BTC is Tesla. Tesla has announced in its 2nd quarter report that it has sold 75% of its position, or 29,060 BTC. Tesla still owns 9,686 BTC. This was 43,053 BTC on February 1, 2021.
By the first quarter of 2021, Tesla had already sold 10% of its position to test bitcoin’s liquidity as bitcoin surged. This sale caused the average buy price per BTC to drop from $34,841 to $33,325. As a result, Tesla made only a small loss on its second sale.
Not only institutional investors feel the pain
June was again not a good month for bitcoin. This time, the pressure on the sell side came from the release of US interest rates. This caused the price to fall sharply again.
Not only were institutional parties forced to sell their BTC, we also saw miners doing the same. In total, miners had to sell for about 4,400 BTC.
According to Lunde, we have seen a capitulation phase over the past two months. The downward price action could have been much worse as retail investors were also flooded and able to sell. For now, Lunde believes the negative sentiment has eased as confidence returns to the market.
