Economist and gold investor Peter Schiff has stated that the transfer of Bitcoin from long-term holders to newer market participants is likely to cause future drawdowns to intensify.
Schiff commented on Saturday that Bitcoin is "finally having its IPO moment," suggesting that sufficient liquidity is now available for original holders to exit their positions. He warned that "this much Bitcoin moving from strong to weak hands not only increases the float, but also means future sell-offs will be bigger."
Market Dynamics and Holder Behavior
In October, long-term holders and whales sold over 400,000 BTC, contributing significant selling pressure that pushed prices below $85,000. The current market downturn has led to divided opinions among analysts regarding whether the bull trend will resume once liquidity improves or if the market is entering the next bear cycle.
Data from CryptoQuant indicates that BTC exchange inflow, which tracks coins sent to exchanges for selling, remains elevated. This metric suggests a continued distribution of assets by holders seeking to exit their positions at current price levels.
Notable Holder Exits
Owen Gunden, identified as one of the earliest BTC holders, sold his entire holdings of 11,000 coins, valued at approximately $1.3 billion, during October and November. Additionally, Robert Kiyosaki, author of "Rich Dad, Poor Dad," announced on Friday that he had sold all his BTC holdings, which were valued at around $2.25 million.
Kiyosaki explained that he had purchased Bitcoin at approximately $6,000 per coin and exited his position near the $90,000 level. He indicated plans to reinvest the profits into income-producing businesses, adding, "I am still very bullish and optimistic on Bitcoin and will begin acquiring more with my positive cash flow."
Analyst Perspectives on Market Drivers
Analysts at the crypto exchange Bitfinex have identified strong selling pressure from long-term holders cashing out and leveraged liquidations as the primary factors contributing to the short-term price drawdown. They maintain that Bitcoin's fundamentals remain robust and attractive to institutional investors, who are expected to continue adopting the asset and driving demand.
Vineet Budki, CEO of venture firm Sigma Capital, shared his outlook with Cointelegraph, predicting that retail investors are likely to sell their Bitcoin at the first sign of trouble. He forecasts that this lack of conviction among retail participants could lead to a 70% price drawdown in the upcoming bear market. The divergence between institutional accumulation and retail distribution may prove to be a key factor in determining whether the current volatility represents a temporary correction or the onset of an extended downturn for the cryptocurrency markets.