Bitcoin’s ‘Silent IPO’: Early Holders Exit as Institutions Enter Amid Market Maturation

The European Commission is exploring plans to bring stock and cryptocurrency exchanges under central supervision as part of a broader effort to make the bloc’s capital markets more competitive with those in the US.

The incoming proposal would expand the European Securities and Markets Authority’s (ESMA) jurisdiction to include stock and crypto exchanges, as well as crypto asset service providers and other trading infrastructure, the Financial Times reported on Saturday.

The EU's current landscape comprises numerous national and regional regulatory agencies, which significantly raises the cost of cross-border trade, hindering startup development in the region.

Empowering a single supervisory body akin to the US Securities and Exchange Commission (SEC) may be the next step for the EU's “capital markets union,” which is also backed by European Central Bank (ECB) President Christine Lagarde.

“Creating a European SEC, for example, by extending the powers of ESMA, could be the answer. It would need a broad mandate, including direct supervision, to mitigate systemic risks posed by large cross-border firms,” Lagarde said at the European Banking Congress in November 2023.

The commission is set to publish a draft in December, according to people familiar with the matter who spoke with the FT.

The proposal would also enable ESMA to have the final say in disputes between asset managers, issuing binding decisions without direct supervision.

Recent on-chain data shows that a relevant class of Bitcoin investors known as long-term holders has continued to move out of their market positions.

LTHs Actively Switching To Distribution 

In a November 1st post on social media platform X, popular on-chain analyst Burak Kesmeci shared an insight into the prevalent structural bias among Bitcoin’s long-term holders. Kesmeci’s analysis hinges on the Long-Term Holder Net Position Change metric, which tracks the net buying or selling behavior of Bitcoin’s long-term investors over a period of 30 days.

Related Reading: Bitcoin At A ‘Do-Or-Die’ Level As Cycle Faces First Real Test: Analyst

A positive reading is usually interpreted as a sign that the LTHs are in a net accumulation phase, as there are more market participants within this investor class buying Bitcoin than those who are selling. On the flipside, when the Long-Term Holder Net Position Change metric is negative, it means that the LTHs are in a distribution phase.

Kesmeci explained in his post that there has been an increasing amount of momentum towards the sell side of the metric. In the highlighted chart, around 400,000 BTC appears to have been sold off in the past 30 days. Interestingly, the LTHs don’t seem to be easing off on their sales — a behavior which stands equally as a source of concern. 

In a case where Bitcoin’s long-term investors do desist from selling their holdings, Bitcoin could put in a local price bottom, as this typically indicates renewed interest and ‘smart money’ positioning for the next cycle. However, if this distribution momentum continues to grow, the premier cryptocurrency could continue towards the downside, as its long-term holders continue to inject more bearish pressure.

LTH 2.2% Supply Drop Relatively Modest — Analyst

In another X post, crypto pundit Darkfost shed light on the implications of Bitcoin’s LTH behavior shift. According to the analyst, the 2.2% “modest reduction” of Bitcoin LTH supply in October is not much to worry about, especially when compared to the levels seen in 2024. 

As of March 2024, Bitcoin’s LTH supply dropped by approximately 5.05%. In December, there was an even higher decline of about 5.2%. Darkfost implied that the present distribution the market is seeing could therefore be a result of early profit taking, where the market could soon see a rebound of the Bitcoin price. 

Nonetheless, the long-term holder net position’s trend is one that should be monitored, as a move back towards neutral readings could signal the start of an accumulation phase and subsequent price reversal to the upside.

As of this writing, BTC is valued at approximately $110,750, with no significant movement in the past 24 hours.

The European Commission is planning to introduce a proposal in December to centralize regulation of stock exchanges, crypto exchanges, and clearing houses under one entity, modeled after the U.S. Securities and Exchange Commission (SEC), according to a recent FT report. 

The move towards a "capital markets union" is intended to make it easier for small finance startups to scale across borders, without having to gain approval from a litany of regional and national regulators. The commission is planning to introduce proposals in December, the report states. 

One idea is to expand the powers of the existing European Securities and Markets Authority to cover significant cross-border financial entities, such as stock exchanges, crypto firms, and other post-trading infrastructure, though this idea is "contentious," according to the report. ECB President Christine Lagarde supports the move, along with her predecessor Mario Draghi. Lagarde also backed Germany's call for a single European stock exchange, Reuters recently reported. 

The commission told the FT it was "still exploring the potential of EU level supervision in relation to some critical infrastructures, such as central counterparties, central securities depositories and trading venues, as well as in relation to big cross-border entities such as asset managers." 

Luxembourg and Dublin reportedly "balked" at the prospect of a single supervisor, expressing skepticism that the EU will act in the best interests of smaller nations with finance hubs. 

The European Commission and European Union finance ministers have made several moves towards centralizing oversight of key areas of crypto, from stablecoins to exchanges, in recent months. Lagarde and EU finance ministers recently agreed on a roadmap for issuing a digital euro Central Bank Digital Currency (CBDC), and the Commission is also planning proposals for December that deal with real-world asset tokenization, The Block previously reported. 

If the Commission presents the package in December, it would begin the ordinary legislative process with the European Parliament and Council, including amendments and trilogue negotiations that could extend into 2026.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Federal Reserve (Fed) injected $29.4 billion into the US banking system through overnight repo operations on Friday, the largest single-day move since the dot-com era. At the same time, China’s central bank deployed a record cash infusion to reinforce its domestic banking sector.

These coordinated liquidity moves signal a turning point for global risk assets, especially Bitcoin . Traders are closely monitoring how central banks act to stabilize markets ahead of 2026.

Fed’s Liquidity Move Highlights Market Tension

The Fed’s unusually large overnight repo operation followed sharp Treasury sell-offs and reflected growing stress in short-term credit markets.

Overnight repos enable institutions to exchange securities for cash, providing immediate liquidity in times of tight market conditions. The October 31 injection set a multi-decade record, even compared to the dot-com bubble era.

Many analysts interpret this move as a clear response to stress in Treasury markets. When bond yields rise and funding becomes more expensive, the Fed often steps in to limit systemic risks.

These interventions also expand the money supply, a factor that often correlates with rallies in risk assets such as Bitcoin.

Meanwhile, Fed Governor Christopher Waller recently called for an interest rate cut in December, indicating a potential shift toward more accommodative policy.

This contrasts with earlier hawkish remarks from Fed Chair Jerome Powell, whose caution has fueled market uncertainty. Polymarket data now puts the odds for a third 2025 rate cut at 65%, down from 90%, showing shifting expectations for monetary policy.

If the Fed fails to meet these expectations, markets could face a sharp downturn. Investors have already priced in easier policy, and any reversal might cause capital to exit riskier assets.

The difficult balance between liquidity injections and rate policy highlights the Fed’s challenge as it manages inflation and financial stability.

China’s Record Cash Infusion Boosts Global Liquidity

Meanwhile, China’s central bank also executed a record cash injection into domestic banks, aiming to support economic growth amid softening demand. The People’s Bank of China (PBOC) increased liquidity in a bid to keep lending active and prevent credit tightening. This action comes as Beijing addresses deflation and a weakened property sector.

The size of the PBOC’s move is comparable to its responses during past crises. By supplying extra funds, the central bank wants to lower borrowing costs and stimulate credit growth.

Such stimulus also expands global money supply and could contribute to asset inflation in stocks and cryptocurrencies.

Historically, simultaneous liquidity boosts by the Fed and PBOC have preceded major Bitcoin rallies. The 2020-2021 bull run happened alongside aggressive monetary easing after the COVID-19 outbreak.

Crypto traders now watch for a similar trend, as increased liquidity can lead investors to seek alternative assets that hedge against currency devaluation.

Macro analysts describe the situation as a “liquidity tug-of-war” between Washington and Beijing. The Fed is balancing inflation and financial stability, while the PBOC seeks to promote growth without fueling further debt. The outcome will influence risk appetite and set the tone for asset performance in 2025.

Bitcoin’s Macro Outlook Depends on Ongoing Liquidity

Bitcoin’s price has remained steady in recent weeks, staying within a narrow band as traders weigh the impact of central bank actions.

The pioneer crypto shows signs of consolidation, with Coinglass data indicating open interest dropped from above 100,000 contracts in October to near 90,000 in early November. This decrease signals caution among derivatives traders.

Despite subdued activity, the environment could become positive for Bitcoin if global liquidity continues to grow. Lower inflation in the US, paired with an expanding money supply, favors risk-taking.

Many institutional investors now consider Bitcoin a store of value, especially when monetary expansion puts pressure on the purchasing power of traditional currencies.

However, Bitcoin’s rally may depend on the decisions of central banks. If the Fed reduces liquidity too soon through scaled-back repo operations or unexpected rate hikes, any positive momentum could quickly vanish.

Likewise, if China’s stimulus fails to revive its economy, global risk sentiment may weaken, impacting speculative assets.

The next several weeks will show whether central banks maintain liquidity support or prioritize inflation control. For Bitcoin, the outcome could decide if 2026 brings another strong bull run or just continued consolidation.