The cryptocurrency market has seen one of the steepest falls in history, with bitcoin being one of the protagonists, with a plunge of around 70% from its all-time high.
This massive wave of selling has caused a number of companies, BTC holders and otherwise, to sell their assets to avoid being liquidated with this collapse, further boosting sales. In fact, Bloomberg reported that the first Bitcoin ETF, Purpose Bitcoin, recently completed an anonymous sale of $500 million, or 24,510 bitcoins and 51% of the assets under the ETF’s administrative management.
Commenting on what happened, Vlad Tasevski, chief operating officer of Purpose Investments, explained that this was obviously the largest cash outflow ever seen, and it was simply a way to find out how investors feel about the current outlook.
However, he also explained that they have no idea who is behind these moves. Since the structure of Purpose Bitcoin is completely anonymous, there is no direct visibility of who is responsible for this exit. “And also, he added, if we knew that, we wouldn’t normally comment on what our customers are doing.”
Experts debate the issue
On the other hand, experts explain that it is very likely that this massive exit or the sale of the first Bitcoin ETF was the cause of the generation of a large liquidation in the market, which could have prolonged the fall until at a minimum of $17,599, Arcane Crypto analyst Vetle Lunde added.
Additionally, ETF Store President Nate Geraci explained that it could be a forced sale, agreeing with Vetle Lunde’s comments. In effect, “one or more holders may have needed BTC, either to meet a loan obligation or otherwise“.
Recall that bitcoin futures, trade loans, and bitcoin ETFs have been very popular since their inception. Because it’s a way to get exposure to cryptocurrency without having to buy it directly. For this reason, it is quite likely that there will be forced liquidations by over-leveraged traders. And in fact, the latter may have been the cause of bitcoin’s fall to its current levels, concluded Nate Geraci.