The collapse of the Terra ecosystem it was one of the defining moments in the history of the crypto market that even rocked some of the largest institutions. According to the Arcane Research report, almost a quarter of a million Bitcoins have been sold by institutional players since May 2022.
Vetle Lunde, an analyst at digital asset analysis firm Arcane Research, reveals that the exact number of Bitcoin sold is 236,237 BTC. These figures are specifically after May 10, sometime around the time of the collapse of the Terra ecosystem.
Lunde noted that the 236,237 BTC number comes from large institutional blowouts as well as some known selloffs seen in the past two months. However, a great contribution from Terra herself. The platform sold its massive 80,000 BTC reserves to save USD parity for its TerraUSD stablecoin. Lunde explains:
It all started with Do Kwon. When LFG reached its initial $3 billion BTC reserve target, it took 5 days before the UST parity collapsed, and the 80k BTC reserve was deployed in a desperate attempt to save the parity. Luna collapsed, causing contagion and more pressure from the sell side.
Tesla sold BTC in early April 2022
As we know, Tesla had already sold 75% of its Bitcoin holdings in early April. Elon Musk confirmed the same thing during his earnings calls earlier this year. Tesla said the company made the decision to increase its cash position amid China’s COVID lockdowns and an uncertain macro environment.
According to Lunde’s estimates, Tesla sold 29,060 BTC at an average price of $32,209. The Arcane Research analyst explains:
This estimate is based on previous VWAP estimates of your initial purchase of BTC (average price of $34,841) and sale of 10% of your BTC to “test liquidity” in Q1 2021. The new breakeven price of BTC of Tesla was about $33,325, which means that Tesla sold at a slight loss.
Bitcoin miner sales continued
Later, as heavy sell-offs continued, Bitcoin came under intense selling pressure. With the collapse of the price of BTC and the reduction of profitability, a large number of Bitcoin miners decided to dump their assets to cover operating costs.
According to the previous report from Arcan Research, Bitcoin miners had to sell 100% of their May harvest. During the first four months of 2022, Bitcoin miners liquidated only 30 percent of their monthly production. However, sales tripled during the month of May 2022.
As analyst Vetle Lunde points out:
“Markets soured and public miners were pressured to start selling their prized BTC holdings in May. Public BTC miners sold 4,456 BTC in May.”
June was the month in which the main liquidations began after the collapse of crypto lenders and the hedge fund 3AC. Crypto lender insolvencies have given the crypto space a bad image and exposed holes in the leverage ecosystem.