Bitcoin’s price just doesn’t want to stop climbing. The leading digital currency shot past $73,000 recently, hitting another new all-time high price. But as Bitcoin keeps setting records, some of the investors who’ve been holding it for years are deciding to cash out at these lofty levels.
Blockchain data analysts at Glassnode found that around $2.6 billion in Bitcoin profits are being taken daily right now. A huge portion of those profits are being realized by long-term investors – folks who’ve owned Bitcoin for a long time and held on through all the price ups and downs over the years.
This isn’t the first time something like this has happened in BTC’s history. Past rallies that sent prices skyrocketing also saw similar behaviors from long-term holders. As prices blast into levels never seen before, the investors who’ve been patiently holding their BTC for years start selling some of it to people looking to buy in at the top. It’s like a transfer of crypto wealth from the hands of seasoned investors to fresh money trying to ride the wave.
Around 1 million bitcoins changed hands recently in the price range between $61,200 on the lower end up to the new record high of $73,200. That massive number represents BTC assigned updated valuations in that range as they swapped owners. Analysts estimate about 40% of the $2.6 billion daily profit total comes from entities like the Grayscale Bitcoin Trust cashing out some of their long-term holdings.
Normal Operating Procedure During Bitcoin Frenzies
This cycle is pretty typical based on what’s happened after previous Bitcoin bull runs. Once prices go vertical, the early buyers who took a risk stacking BTC years ago start selling portions of their stash at huge profits. The new buyers jumping in are gladly paying premium prices, perpetuating the frenzy higher.
While it may seem alarming to some to see so many coins being sold, this type of distribution has been a normal operating procedure when Bitcoin goes parabolic. This distribution from old, aged investor wallets to fresh capital entering is simply the normal cycle when speculative mania takes over. As crypto goes even more mainstream, these wild price cycles will likely become even crazier.
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