As Bitcoin (BTC) plummeted through $90,000, Strategy purchased 8,178 BTC for $835.6 million, locking in an average of $102,171 that is currently in the red.
In its September 30 13F filing, Harvard Management Co. disclosed holdings of 6.8 million IBIT shares valued at $442.9 million, tripling its previous quarter and becoming the endowment’s largest US listed equity holding.
Both transactions occurred as funding rates went negative, open interest unwound, and short-term holders sold at losses, indicating a shift from weaker hands to those with stronger balance sheets.
Despite the recent losses, Strategy’s overall position remains profitable with an aggregate cost basis of $74,433.
Harvard’s increased exposure to Bitcoin during the price decline demonstrates a bet on mean reversion and long-term demand rather than panic selling.
Who sold during the dip
Short-term holders, particularly retail investors, realized losses during the selloff, characterized as on-chain capitulation by Glassnode.
Funding rates on perpetual swaps turned negative, indicating long liquidations and deleveraging rather than new short positions.
US spot Bitcoin ETFs experienced significant outflows in November, coinciding with the price drop below $90,000.
This dual selling pressure from retail wallets and ETF redemptions created an opportunity for long-term buyers to enter at lower prices.
Accumulation trends
Glassnode data showed that wallets holding over 1,000 BTC increased their holdings while smaller holders exited, aligning with redistribution patterns observed in previous market cycles.
Traceable moves on the blockchain, such as wallets linked to specific events buying altcoins during volatility, suggest smart money accumulating assets.
While CryptoQuant’s CEO noted whale exits from Bitcoin futures, retail investors still held the majority of open interest, implying deleveraging rather than large-scale sell-offs.
Potential bull-trap scenario
ETF outflows removed structural demand that had supported Bitcoin’s price, potentially leading to further declines if the trend continues.
Short-term holder capitulation and whale accumulation during the recent drop may not indicate future market trends, especially if ETF redemptions persist.
Spot demand and macroeconomic conditions will ultimately determine whether the market stabilizes or experiences another leg down.
Outlook and considerations
The outcome will depend on institutional spot demand offsetting ETF outflows and the stability of derivatives funding.
Strategy’s ability to average down and Harvard’s long-term investment horizon contrast with the actions of retail investors, highlighting the different player motivations in the market.
The recent market turbulence has revealed the resilience of some holders in the face of volatility, setting the stage for potential market direction shifts in the coming weeks.
