Bitcoin Faces Pressure as Long-Term Holders Reduce Exposure

In contrast, short-term holders (STHs) have noticeably increased their exposure. Meanwhile, a Bitcoin whale that has been inactive for a decade recently moved millions to Kraken, which reignited speculation about Satoshi Nakamoto’s identity. Michael Saylor also urged his followers to buy Bitcoin yet again, while Rajiv Khemani raised concerns about Bitcoin’s decentralization and national security during a recent interview. Khemani is especially concerned about foreign control over mining hardware and hashrate distribution.

Bitcoin’s Momentum Weakens

Bitcoin’s price faces potential selling pressure as long-term holders (LTHs) start to offload their positions, and the value of their BTC exposure decreases by billions. Research from CryptoQuant reveals that seasoned Bitcoin holders, who are defined as those holding BTC for 155 days or more, are now adopting a more risk-averse stance.

According to the platform’s analysis, the net position change for LTHs has seen a “sharp decrease” of $6 billion in their realized cap, dropping from $19 billion to $12 billion. This suggests that long-term holders are very  likely taking profits or closing their buying positions. 

Bitcoin’s SHT vs LTH net position realized cap (Source: CryptoQuant)

In contrast, short-term holders (STHs) seem to be moving in the opposite direction, and are showing a willingness to take on more risk. These entities, who typically hold BTC for less than 155 days, increased their exposure by $6 billion, and the STH realized cap improved from -$17 billion to -$11 billion. This divergence in behavior suggests that speculators are stepping into the market as seasoned investors pull back.

Bitcoin’s price momentum also appears to be under scrutiny, with traders paying very close attention to key levels where the price and the realized price for coins moved between one day and one week ago interact closely. At press time, this realized price stands at $62,080, which is just slightly below the current BTC/USD spot price. 

Bitcoin realized price (Source: CryptoQuant)

Repeated interactions between these two levels suggest that the market may be facing weakening momentum. This could lead to potential short-term corrections as price attempts to hold above the realized price have been met with rejections.

Ancient Bitcoin Wallet Transfers Millions to Kraken

The fact that LTHs could be lowering their Bitcoin exposure is proven by the fact that a Bitcoin whale that was active since the early days of the network, moved a large amount of BTC to the crypto exchange Kraken recently. According to data firm Arkham Intelligence, this whale mined Bitcoin in the first two months after Bitcoin’s launch in February of 2009. 

On Oct. 3, the whale transferred 10 Bitcoin, which is worth close to $610,000. This was one of several transfers. Since Sept. 24, the whale has moved a total of $3.58 million to Kraken.

The wallet associated with the whale was dormant for almost a decade before these recent movements. Between 2011 and 2014, the Bitcoin in the wallet was moved multiple times, but then stayed inactive for ten years as its value grew from $474,000 to over $80 million. According to Arkham’s data, the wallet still holds 1,169 Bitcoin, worth about $74 million at today’s prices.

This activity also resurfaced speculation about the true identity of Bitcoin’s mysterious creator, Satoshi Nakamoto. HBO is preparing to release a documentary that is titled “Money Electric: The Bitcoin Mystery,” which claims to reveal Nakamoto’s identity.

Many people believe that the late American computer scientist Len Sassaman could be Nakamoto. Sassaman passed away in July of 2011, and was memorialized in Block 138,725 of the Bitcoin blockchain. Despite his known involvement in the cryptography community, it is not clear how closely Sassaman was actually connected to Bitcoin. In 2021, his widow stated that to her knowledge, Sassaman was not Nakamoto.

Michael Saylor Urges Followers to Buy Bitcoin Again

Bitcoin evangelist Michael Saylor recently took to social media to encourage his followers to invest in what he calls “a piece of cyberspace,” continuing his promotion of Bitcoin as more than just a digital currency. Saylor previously referred to Bitcoin as a “shiny city in cyberspace,” and now believes that the crypto allows users to transfer and store value digitally without relying on a trusted third party. In his view, Bitcoin opens a portal between the physical and digital worlds, enabling the flow of energy into cyberspace.

Saylor has often used the metaphor of cyberspace to describe Bitcoin, including during a March interview with CNBC, where he compared it to expensive real estate, and pointed out its role in preserving capital rather than serving as a medium of exchange. He believes that Bitcoin’s primary function is to store and safeguard wealth in the digital realm.

Saylor’s latest pitch came as Bitcoin’s price was able to gain some momentum at the end of the weekend. At press time, BTC was trading hands at $63,649.93 after its price managed to climb by 2.81% over the past 24 hours of trading. BTC was still in the red by about 1.25% on its weekly time frame.  

Bitcoin Decentralization a National Security Issue

Rajiv Khemani, the co-founder and CEO of mining chip manufacturer Auradine, recently talked about the importance of ensuring Bitcoin’s decentralization throughout the entire technological stack. He even argued that it is a matter of national security. 

In a recent interview, Khemani explained how third-party firmware could be used to compromise Bitcoin’s security. Malicious code embedded in firmware updates could potentially shut down mining operations in specific regions, which will reduce hashrate and network difficulty, thus increasing the risk of a 51% attack on the Bitcoin network.

Bitcoin hash rate (Source: Blockchain.com)

Khemani also pointed out that there is a need for caution when using hardware and software from foreign entities, especially when these technologies are integrated into energy infrastructure. Additionally, he warned people about supply chain risks, and pointed out that if specialized mining hardware like application-specific integrated circuits (ASICs) is predominantly manufactured in a single jurisdiction, that country could restrict exports, which could leave miners without essential equipment.

While Khemani dismissed concerns raised by US Senator Elizabeth Warren about mining hardware being used to spy on military bases, he did stress that the United States should implement policies that promote domestic manufacturing of ASICs. Additionally, no single country should control the majority of Bitcoin’s hash power or mining hardware supply.

Concerns over hashrate distribution have also been raised by others in the industry. In May of 2024, reports indicated that two mining pools, AntPool and Foundry, controlled more than 50% of the network’s hashrate. 

More recently, CryptoQuant’s Ki Young Ju claimed that Chinese mining pools accounted for 55% of the hashrate. However, TheMinerMag disputed this, and argued that miners participating in Chinese-based pools are geographically distributed, making it difficult for any one country to dominate the network’s hash power.