A significant transfer of Bitcoin (BTC) from established holders to newer investors, often referred to as ‘weak’ hands, is likely to exacerbate future price declines, according to Peter Schiff, a well-known gold investor and economist. Schiff remarked that the current state of liquidity in the Bitcoin market resembles an initial public offering (IPO), allowing long-term holders to sell their assets easily.
“This much Bitcoin moving from strong to weak hands not only increases the float, but also means future selloffs will be bigger,” Schiff stated.
Translation: “This large amount of Bitcoin changing hands from stable holders to less confident investors will not only increase market volatility but will also intensify future declines in prices.”
Long-term holders have recently sold over 400,000 BTC in October, noticeably influencing market conditions, which helped pull the price below $85,000. This ongoing downturn has led to varied viewpoints among analysts and investors on whether the bullish trend will continue once liquidity improves or if a bearish market is ahead.
In related developments, Owen Gunden, a pioneer among Bitcoin investors, liquidated his holdings of 11,000 BTC, equivalent to roughly $1.3 billion. Robert Kiyosaki, author of ‘Rich Dad, Poor Dad’, declared that he sold his entire Bitcoin holdings worth about $2.25 million, despite having originally bought in at about $6,000. He stated that he plans to reinvest his earnings into income-generating ventures. Kiyosaki expressed his continued optimism for Bitcoin’s future, emphasizing his intent to buy more with upcoming cash flows.
Analysts from Bitfinex highlighted that the robust selling pressure from established holders and liquidations in crypto derivatives markets are crucial factors behind the short-term downturn. However, they believe Bitcoin’s fundamental strengths make it appealing to institutional investors, who will persist in embracing BTC to boost demand. Conversely, retail investors, according to Vineet Budki, CEO of Sigma Capital, may hastily sell their Bitcoin at the first signs of difficulty, risking a 70% price correction in the forthcoming bear market.
