While the contagion effects of FTX’s collapse still cannot be fully assessed, Bitcoin whales and OGs appear to be playing it safe.
In particular, the fate of Genesis Trading, DCG and Grayscale hangs like a sword of Damocles over the Bitcoin market. This uncertainty is especially evident in the cohort of Bitcoin whales and long-term holders.
As Glassnode points out in its latest reportrecent on-chain data suggests that “the confidence and financial position of whales and Bitcoin old hands have been shaken by the event.”
According to Glassnode, whales, institutions and trading firms take up a larger share of deposits. The average deposit size on all major exchanges has increased significantly.
This is a trend seen in other late stages of a bear market, such as that of 2018-19. A similar trend was also visible at the end of May after the collapse of LUNA-UST project.
Glassnode concludes from the data that a driving factor could be the financial situation of Whales (holders > 1k BTC). The average payout price of the whale cohort since Binance launched on July 5, 2017 is currently $17,825.
With a spot price currently below $16,000, this is the first time since March 2020 that the whale cohort has suffered an unrealized loss. “In response, Whales have actually been depositing coins on exchanges, with a surplus of between 5,000 and 7,000 BTC per day over the past week,” said Glassnode.
Not only Bitcoin Whales show weak hands
However, not only whales, but also long-term keepers are dealing with weak hands right now. Thus, the spending of long-term holders of Bitcoin is increasing.
According to Glassnode, the Spent Volume Age Bands (SVAB) statistic shows that just over 4% of total volume issued this week came from coins older than three months, which is the highest level in 2022.
“This relative size coincides with some of the largest in history, often seen during capitulation events and large-scale panic events,” the research firm said.
At its fifth-highest historical level, BTC volume is over 6 months old. As Glassnode points out, over 130,600 BTC was spent on November 17 alone. The 7-day average is now 50,100 BTC per day.
Since the collapse of FTX, a total of 254,000 BTC older than 6 months has been spent. This represents about 1.3% of the circulating supply. On a 30-day basis, this is the highest since the bull market in January 2021, when long-term investors took profits.
According to Glassnode, it remains to be seen if the current on-chain trends are short-lived or if there is a serious loss of confidence in the Bitcoin market caused by the Sam Bankman-Fried fraud scheme:
[A] delay and return of these metrics would mean that this could be a short term event, but with each passing day that these trends continue, it becomes more and more plausible that a greater downscaling is at play.
At the time of writing, BTC price was just hovering at yesterday’s new bear market low of $15,478.