With SpaceX's IPO approaching, speculation has arisen that some retail investors may be selling Bitcoin to prepare cash for subscribing to new shares. CoinDesk, after analyzing stablecoin flows and on-chain data, states that there is currently no clear evidence of an unusually large-scale cash-out in the crypto market.
Stablecoin redemptions have not seen a significant increase.
Stablecoins are a relatively direct indicator of whether funds are withdrawing from the crypto market. If investors sell Bitcoin and transfer it to a brokerage account, they typically exchange it for USDC or USDT first, and then redeem it for USD. This usually manifests as a flow of stablecoins out of exchanges and a subsequent contraction in the token supply.
The report, citing CryptoQuant data, stated that the outflow of USDC and USDT remains within the normal range since February of this year, without any abnormal increase. The largest single-day fluctuations in recent months were approximately $2.5 billion in USDC outflow on May 22nd and approximately $3.6 billion in USDT outflow on May 20th, both occurring before this week's correction.
Exchange withdrawals increase
In terms of price, Bitcoin fell by about 16% at one point during the same period, briefly dipping below $60,000, before recovering to around $61,000. On-chain data shows that approximately 66,470 Bitcoins and 2.49 million Ethereums flowed out of exchanges last Friday, representing one of the largest single-day outflows this year.
Such outflows typically indicate that assets are being transferred to private wallets, rather than being prepared for sale. This is because selling usually corresponds to the coins flowing back into exchanges. Based on this logic, the larger on-chain flows this week are more likely to be withdrawals and buying on dips, rather than a concentrated effort to obtain cash for new share subscriptions.
ETF redemptions better reflect selling pressure
The most evident outflows so far have primarily come from spot cryptocurrency ETFs. The spot Bitcoin ETF experienced net outflows for 13 consecutive trading days as of June 3rd, accumulating approximately $4.4 billion, before seeing a small net inflow of about $3 million. The spot Ethereum ETF saw even longer consecutive outflows, lasting 17 trading days, all ending on the same day.
When an ETF experiences redemptions, the issuer needs to sell the underlying assets, thus this selling pressure constitutes a genuine sell-off. In contrast, claims that retail investors sold cryptocurrency to participate in the SpaceX IPO currently lack verifiable data to support them.
Brokerage data still pending disclosure
However, on-chain data also has blind spots. If a user directly converts Bitcoin to USD within their Robinhood or Coinbase account, and the funds don't pass through a public blockchain, this change cannot be directly identified on-chain. The report mentions that Robinhood is expected to release its June transaction data in mid-July, and Coinbase will also disclose more information about its retail business in its Q2 results.
Additional information:The report mentioned that SpaceX plans to price its products on June 11 and list them on Nasdaq the following day under the ticker symbol SPCX.
