Bitcoin whales, or large holders of the cryptocurrency, have sold over $1 billion worth of BTC in the past two weeks, coinciding with net outflows from U.S.-listed bitcoin ETFs.
According to on-chain analytics firm CryptoQuant, wallets associated with these whales have offloaded more than $1.2 billion worth of Bitcoin during this period. The selling activity appears to have been conducted primarily through brokers rather than on the open market.
This selling spree by long-term Bitcoin holders and miners has been reflected in a decline in UTXO (unspent transaction output) age bands, a metric used to track buying and selling patterns in the market. A drop in UTXO age typically indicates increased Bitcoin activity and selling pressure.
Analysts have noted that traders are still not increasing their Bitcoin holdings, and demand growth from large holders remains lacking. Additionally, the growth of stablecoin liquidity has slowed down, marking the slowest pace since November 2023.
One potential factor contributing to the selling pressure is the shift of miners towards the booming artificial intelligence (AI) sector. Both Bitcoin mining and AI rely heavily on powerful computing chips, a resource that miners already possess. As mining rewards have declined post-halving, miners may be increasingly diverting their attention and resources to the AI industry, selling their Bitcoin rewards instead of holding them.
"One of the biggest trends since Bitcoin's halving this year is miners increasingly eyeing the artificial intelligence (AI) sector instead of Bitcoin," said Lucy Hu, senior analyst at crypto fund Metalpha. "The fall in mining rewards has prompted miners to seek other revenue channels. With AI firms demanding energy-intensive data centers, Bitcoin miners are gradually growing revenue from sales to AI firms."
The selling activity by Bitcoin whales has coincided with net outflows from U.S.-listed bitcoin ETFs, which recorded over $600 million in outflows last week, the worst performance since late April. This bearish sentiment has contributed to a decline in Bitcoin prices, with the cryptocurrency dropping from around $71,000 on June 5 to just over $65,000 according of the latest data.
Some market observers have warned of a potential further drop in Bitcoin prices to as low as $60,000 in the absence of growth catalysts. The broader cryptocurrency market has also followed Bitcoin's downward trend, with leading cryptocurrencies mirroring the overall bearish sentiment.
In summary, the recent selling activity by Bitcoin whales, coinciding with net outflows from U.S.-listed bitcoin ETFs, suggests a shift in market dynamics and a potential cooling of investor appetite for the cryptocurrency. The potential diversion of miners towards the AI sector and the broader macroeconomic factors may have contributed to this trend, which could have further implications for the crypto market in the near future.
