Bitcoin whales are profiting as 'weak hands' sell BTC throughout $40K bull run
Comment of the Day

January 11 2021

Commentary by Eoin Treacy

Bitcoin whales are profiting as 'weak hands' sell BTC throughout $40K bull run

This article by William Subery for may be of interest to subscribers. Here is a section:

While institutional buy-ins have become the standard narrative of Bitcoin over the past few months, a rogue “weak hands” signal from one of them caught analysts’ attention this week.

As Cointelegraph reported, Guggenheim Partners, which announced a sizable fund allocation to BTC in late November, is allegedly planning to sell some of its holdings already. The trigger came from chief investment officer Scott Minerd, who on Monday said that Bitcoin’s weekend drop provides the impetus to rethink its position.

“Bitcoin's parabolic rise is unsustainable in the near term," he wrote. "Vulnerable to a setback.”

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

His suggestion appeared to confuse market participants, with responses questioning the rationale behind the decision, coming just weeks after Guggenheim’s initial entry.

“CIO of huge firm day trading btc? It's a 5-10yr hold minimum,” macro investor Dan Tapeiro argued.

Institutional uptake comes amid a more fundamental supply and demand squeeze for Bitcoin, with large buyers already outpacing what miners can produce each month. At the same time, miners have stepped up their sales in recent days in what one theory suggests is some well-earned profit-taking at or near all-time highs.

Eoin Treacy's view

The ownership of bitcoin has become more concentrated over the last six months because institutions have been buying in size. Meanwhile the concentration of mining in a handful of companies is detracting from the decentralised argument for bitcoin. Both of these factors contribute to the speculative nature of the market but detract from the long-term store of value argument.

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