The Great Bitcoin Power Shift: Why Whales Sell and Big Companies Buy
The Bitcoin market, with a staggering value of $2.1 trillion, is currently undergoing a quiet but massive change. There's a steady stream of sales from large, long-term Bitcoin holders – the so-called 'whales'. This includes early miners, large offshore funds, and anonymous crypto wallets. What's striking, however, is that this massive sell-off is being almost one-for-one absorbed by a growing demand from institutional players. These include large investment funds (ETFs), major corporations, and professional asset managers.
Many of these whales have held their Bitcoins since the earliest days, when prices were much lower. Sometimes whales don't even sell their Bitcoins directly on the open market; they swap their tokens for deals linked to the stock market, thereby bypassing direct price impact. Some people call this a “churning in the base.”
Rob Strebel of DRW notes: “Crypto is becoming less of an outlier and more established as a legitimate asset class.” This shift from anonymous, early adopters to regulated institutional investors brings stability and legitimacy to the asset class. A decrease in volatility is a direct consequence of this. A key measure of price swings has even fallen to its lowest level in about two years.
However, with Bitcoin's recent jump to new all-time highs above $120,000, it has become clear that institutional demand is strong enough. They can not only absorb the sales by whales but also push the price further upwards. This shows that, although the power shift from anonymous whales to institutional investors is a long-term trend, the market is still capable of explosive growth. The nature of Bitcoin as an investment asset thus seems to be evolving into an asset that offers both institutional stability and potential for significant value appreciation. According to 10x Research, ETFs, major corporations, and other institutions have absorbed nearly 900,000 Bitcoins in the past year. These parties now hold approximately 4.8 million Bitcoins out of about 20 million Bitcoins in circulation. Markus Thielen, CEO of 10x Research, adds that this shift from anonymous whales to institutional allocators could continue for a long time – even years. He expects “slow grind,” where Bitcoin becomes more of an asset that rises by 10% to 20% annually. The nature of Bitcoin is truly changing as a result.
Disclaimer: This is not financial advice. Always conduct your own research and consult professional advice.
What is the consequence of this shift?
While there's plenty of positive news, such as major companies embracing Bitcoin and even political support, the changes in market structure are leading to decreasing price volatility. Bitcoin is thereby being reshaped in the investment world. Beneath the surface, dormant whales are trimming their positions, precisely as institutions ramp up their purchases. This changing of the guard is gradually transforming Bitcoin's identity: from an exciting, high-risk investment to a more stable long-term investment.Large Sums Changing Hands
Impressive figures support this shift. According to data from 10x Research, large Bitcoin holders (the whales) have sold more than 500,000 Bitcoins in the past year. That's worth over $50 billion at current prices. This amount roughly corresponds to the net inflow into the highly successful US spot Bitcoin ETFs since their approval. For comparison, this is also not far off from the $65 billion accumulated by Michael Saylor and his firm (now known as Strategy) over the past five years.Many of these whales have held their Bitcoins since the earliest days, when prices were much lower. Sometimes whales don't even sell their Bitcoins directly on the open market; they swap their tokens for deals linked to the stock market, thereby bypassing direct price impact. Some people call this a “churning in the base.”
Bitcoin Transforms into a Mature Currency
This trend points to a significant transformation of Bitcoin. Where it was once a 'high-risk' investment with extreme price swings, it is now gradually becoming a more stable currency. Institutions, including major companies like Michael Saylor's firm and dozens of followers and other ETFs, now own approximately a quarter of all Bitcoin in circulation. This is a huge change from 2020, when anonymous accounts reportedly controlled 95% of the digital asset. The power dynamic is shifting fast.Rob Strebel of DRW notes: “Crypto is becoming less of an outlier and more established as a legitimate asset class.” This shift from anonymous, early adopters to regulated institutional investors brings stability and legitimacy to the asset class. A decrease in volatility is a direct consequence of this. A key measure of price swings has even fallen to its lowest level in about two years.
Supply and Demand: Institutional Investors Absorb Whale Sales
However, this development brings interesting perspectives. Some observers previously argued that institutional buyers inadvertently act as an 'exit-ramp' for the whales, increasing the risk that retail and retirement investors would be left holding the bag if crypto sentiment sours. This means they feared that small investors would be stuck if the market crashed.However, with Bitcoin's recent jump to new all-time highs above $120,000, it has become clear that institutional demand is strong enough. They can not only absorb the sales by whales but also push the price further upwards. This shows that, although the power shift from anonymous whales to institutional investors is a long-term trend, the market is still capable of explosive growth. The nature of Bitcoin as an investment asset thus seems to be evolving into an asset that offers both institutional stability and potential for significant value appreciation. According to 10x Research, ETFs, major corporations, and other institutions have absorbed nearly 900,000 Bitcoins in the past year. These parties now hold approximately 4.8 million Bitcoins out of about 20 million Bitcoins in circulation. Markus Thielen, CEO of 10x Research, adds that this shift from anonymous whales to institutional allocators could continue for a long time – even years. He expects “slow grind,” where Bitcoin becomes more of an asset that rises by 10% to 20% annually. The nature of Bitcoin is truly changing as a result.
Risks and Future Prospects for Bitcoin
Nevertheless, the picture is incomplete. Not all whale activity is visible, and Bitcoin could prove volatile again soon enough, especially if a new market catalyst emerges. A major risk right now is imbalance: if Bitcoin whales resume selling at scale while institutional flows plateau, the market could tip into steep declines. Smaller outflows in 2018 (2%) and 2022 (9%), for example, led to price drops of 74% and 64% respectively. Nevertheless, analysts like Thielen remain positive; who knows, this might just be the beginning.Disclaimer: This is not financial advice. Always conduct your own research and consult professional advice.