Bitcoin whales are coming for small wallet holders

Bitcoin is not just changing in price at blistering speed this week—new data shows that the entire market composition is changing with it.

The topic of supply changes was getting considerable attention on Monday as data emerged showing that small holders had been selling to larger wallets throughout the bull run since at least December.

Bitcoin wallet balances of over 1,000 BTC (~$30 million) continue increasing, the data from on-chain analytics service Glassnode reveals, while other sizes of wallet are conversely decreasing. The Bitcoin supply is thus notably being transferred to already wealthy owners.

“Don’t be part of the #BTC transfer to billionaires, corporations and hedge funds …. at least not yet,” entrepreneur and commentator Alistair Milne warned Twitter followers reproducing the data.

Last week, statistician Willy Woo described January’s Bitcoin market climate as a “whale spawning season.” He noted:

“While the narrative is institutional money, this phase, IMO, it’s really institutions  [that] have given Bitcoin validation, and now we have family offices serving the wealthy rushing in needing exposure. There’s a lot of requests for $1m+ buys happening.”

On the topic of weak hands, meanwhile, another curious development saw the CIO of asset manager Guggenheim Partners, which came out as fully bullish on Bitcoin and in November announced plans to invest via the Grayscale Bitcoin Trust (GBTC), described its rise as “unsustainable.”

In a post which immediately garnered its fair share of confused reactions, Scott Minerd said that the weekend’s losses were a clear punctuation mark in the Bitcoin story.

“Bitcoin’s parabolic rise is unsustainable in the near term.  Vulnerable to a setback,” he claimed. 

“The target technical upside of $35,000 has been exceeded.  Time to take some money off the table.”

Should the move become reality, Guggenheim would itself become a unique case among the new round of institutional Bitcoin investors, the narrative surrounding which is universally one of buying large amounts for long-term hodling. 

Reactions nonetheless noted that Guggenheim would only get permission for BTC exposure at the end of January, and that the warnings thus did not amount to a U-turn in philosophy.