Bitcoin’s The biggest early holders, often referred to as the original gangsters, are pressing the sell button after the Federal Reserve upended expectations of falling borrowing costs.
Blockchain data tracked by Lookonchain shows that early Thursday, at least two long-term holders sold a total of more than 1,650 Bitcoins worth more than $117.87 million.
An older whale who had previously sold an 11,000 BTC stack added another 650 BTC to his dump, while another early adopter OG with a 5,000 BTC reserve offloaded a full 1,000 BTC.
As of press time, the price of Bitcoin fell nearly 1% to $70,600, continuing Wednesday’s 3.5% drop from $74,500, according to CoinDesk. The broader market was in the doldrums, with the CoinDesk 20 index falling 3% to 2,056 points. Ethereum (ETH), Ripple (XRP), Solana (SOL) and suffered similar losses.
The Federal Reserve made a hawkish interest rate decision on Wednesday, keeping benchmark borrowing costs unchanged in a range of 3.5%-3.75%, but signaling that the pace of future interest rate cuts will slow down, disappointing risk asset bulls.
The hawkish tone comes from a so-called “dot plot” of interest rates, which shows how Fed voting members expect rates to fall in the coming months. Despite recent labor market weakness, the median forecast points to just one rate cut this year. Furthermore, only two committee members remain in the bipartisan camp, and Chairman Powell’s own personal forecast is higher.
“The inflationary shadow of sticky inflation and rising energy costs has reinvigorated the longer-term higher narrative, forcing investors to abandon dreams of a quick easing cycle,” Matt Mena, cryptocurrency research strategist at 21shares, said in an email.
Taken together, these developments suggest central banks remain wary of inflation, leading to a sharp repricing of bets on Fed rate cuts. Trading on the decentralized platform Polymarket and priced in CME Fed Funds futures now means there is about an 80% chance of one rate cut this year, compared with a 62% chance of two or three rate cuts a month ago.
This prospect of tighter liquidity is not conducive to risk-taking behavior in financial markets.