Learn Crypto

Bitcoin is Crashing! Here’s Who is Selling! and Why!

Hayden Kan

13 Mar 2025 — 2 min read

Bitcoin has recently experienced a significant downturn, with its price dropping to a three-month low of $87,000, marking an 8.5% intraday decline. This decline has raised concerns among investors and analysts alike. In this article, we will explore the primary factors contributing to Bitcoin's recent crash, identify the key sellers in the market, and discuss potential future scenarios for the cryptocurrency.

Factors Contributing to Bitcoin's Decline

1. Macroeconomic Uncertainty

The global economic landscape has been fraught with uncertainty, particularly due to President Donald Trump's proposed tariffs and trade policies. These measures have heightened fears of increased inflation and slowed economic growth, leading investors to retreat from riskier assets like cryptocurrencies. marketwatch.com+3nypost.com+3News.com.au+3

2. Record ETF Outflows

Bitcoin-based exchange-traded funds (ETFs) have seen unprecedented outflows, with $3.3 billion withdrawn in a single month. This mass exodus has intensified selling pressure on Bitcoin, contributing to its price decline. The involvement of large asset managers in Bitcoin ETFs has introduced "faster money" into the market, leading to quicker selloffs during periods of uncertainty. marketwatch.com

3. Major Security Breaches

The cryptocurrency market's vulnerability to cyberattacks has also played a role in Bitcoin's recent downturn. A notable incident involved a $1.5 billion heist attributed to North Korean hackers, which shook investor confidence and contributed to a broader market selloff. the-sun.com+1nypost.com+1

4. Government Policy Announcements

The U.S. government's recent announcement to establish a "Strategic Bitcoin Reserve" has introduced uncertainty into the market. While the move aims to support Bitcoin's value and position the U.S. as a leader in the crypto space, it has also raised concerns about potential market manipulation and the long-term implications of government-held Bitcoin reserves. wired.com

Key Sellers in the Market

The recent selloff in Bitcoin can be attributed to several key market participants:

Institutional Investors: Facing economic uncertainties and potential policy shifts, institutional investors have rebalanced their portfolios, reducing exposure to volatile assets like Bitcoin. marketwatch.com
Hedge Funds: Some hedge funds have unwound basis trades involving Bitcoin ETFs and futures, contributing to increased selling pressure. marketwatch.com
Long-Term Holders: A segment of long-term Bitcoin holders has liquidated positions, possibly in response to market volatility and economic concerns. marketwatch.com

Potential Future Scenarios

The future trajectory of Bitcoin's price will depend on several factors:

Regulatory Developments: The upcoming crypto summit hosted by President Trump could lead to new legislation encouraging institutional adoption, potentially providing a catalyst for Bitcoin's recovery. marketwatch.com+1Business Insider+1
Macroeconomic Conditions: If economic uncertainties persist, Bitcoin may continue to face downward pressure as investors seek safer assets.
Market Sentiment: Stabilization in traditional financial markets and positive developments in the crypto space could restore investor confidence, leading to a potential rebound in Bitcoin's price.

In conclusion, Bitcoin's recent crash is the result of a confluence of macroeconomic uncertainties, significant ETF outflows, security breaches, and evolving government policies. The actions of institutional investors, hedge funds, and long-term holders have collectively contributed to the selling pressure. The cryptocurrency's future will hinge on regulatory developments, economic conditions, and shifts in market sentiment.marketwatch.com