Bitcoin Plunges 30% as Long-Term Holders Trigger Market Stress

Gold investor Peter Schiff’s stark warning that Bitcoin is ‘finally having its IPO moment’ has gained traction as market data reveals coordinated selling from veteran holders. Schiff’s analysis, shared on social media platform X, argues that when long-term holders transform into sellers, supply at the market top increases significantly. ‘This much Bitcoin moving from strong to weak hands not only increases the float, but also means future selloffs will be bigger,’ Schiff stated, highlighting a fundamental shift in market dynamics that could amplify future price declines.

The timing of Schiff’s comments coincides with clear on-chain movements and substantial ETF outflows, lending credibility to his long-standing bearish perspective. Market observers note that when confident, long-term investors typically trim positions near local peaks, but when multiple veterans execute this strategy simultaneously, price action becomes notably more violent. The current market environment suggests Bitcoin has reached sufficient liquidity levels for original investors to cash out substantial positions, marking a maturation phase for the cryptocurrency that mirrors traditional market IPO dynamics.

October witnessed extraordinary activity among Bitcoin’s largest holders, with whales and early wallets moving over 400,000 BTC according to market reports. This substantial movement has been directly linked to increased selling pressure that contributed to Bitcoin’s decline from its all-time high. The scale of these transactions indicates a coordinated exit strategy among some of Bitcoin’s most established investors, creating ripple effects throughout the market structure.

Individual cases highlight the breadth of this selling trend. Early investor Owen Gunden liquidated his entire 11,000 BTC stake across October and November, representing a significant redistribution of long-held coins. Meanwhile, prominent retail figure Robert Kiyosaki announced his sale of approximately $2.25 million worth of Bitcoin, noting he had purchased when BTC traded around $6,000 and sold near $90,000. Kiyosaki indicated plans to redeploy proceeds into income-generating businesses, reflecting a strategic shift away from cryptocurrency speculation toward more traditional business investments.

Analysts at Bitfinex identified two primary drivers behind the recent price drop: sustained selling from long-term holders and leveraged liquidations in derivatives markets. When margin positions unwind under selling pressure, prices can cascade lower before finding substantial support, creating a feedback loop that exacerbates downward momentum. This combination of fundamental selling and technical liquidation has created particularly challenging market conditions.

The institutional landscape has turned decidedly negative, with Bitcoin ETFs experiencing nearly $1 billion in outflows during a single trading session according to Bloomberg and fund filings. This represents the second-largest daily outflow among the group of twelve funds, signaling a significant shift in institutional sentiment. BlackRock’s IBIT led the exodus with $355 million in withdrawals, while Grayscale’s GBTC and Fidelity’s FBTC each saw approximately $200 million depart.

Over the past month, Bitcoin ETF products have recorded roughly $4 billion in net outflows, creating sustained downward pressure on prices. Citi Research analysis, cited by market watchers, estimates that every $1 billion withdrawn from Bitcoin ETFs correlates with approximately a 3.4% negative swing in Bitcoin’s price. This relationship underscores how institutional flows have become a critical price determinant in the current market structure.

Despite the overwhelming negative trend, yesterday’s $238 million of ETF inflows demonstrates how quickly sentiment can reverse in cryptocurrency markets. However, this modest recovery does little to offset the broader pattern of institutional withdrawal. The combination of long-term holder selling and institutional exit creates a challenging environment where supply significantly outweighs demand, potentially establishing new resistance levels that could cap near-term recovery attempts.

The current market dynamics represent a fundamental shift in Bitcoin’s ownership structure that could have lasting implications. As coins transfer from long-term, conviction-driven holders to more speculative retail investors, the market’s foundation becomes increasingly vulnerable to rapid sentiment changes. Schiff’s warning highlights that even with some institutional buying interest, the movement of coins from strong to weak hands could make future price drops both larger and faster than historical corrections.

Market participants are now closely monitoring the behavior of veteran holders, as their collective actions could determine the severity of potential future crashes. The thinning liquidity noted by traders means that price swings are becoming larger than usual, creating both risk and opportunity for active market participants. The current correction serves as a stark reminder that Bitcoin, despite its maturation, remains susceptible to coordinated selling pressure from its earliest and largest stakeholders.

As the market digests this redistribution of Bitcoin ownership, analysts will be watching for stabilization signals and the re-emergence of institutional buying interest. The interplay between long-term holder behavior, ETF flows, and derivative market dynamics will likely dictate Bitcoin’s price trajectory in the coming months, with the potential for either sustained correction or rapid recovery depending on how these factors evolve.