Bitcoin's Silent IPO: The Current Consolidation Isn't What You Think

Author: Jordi Visser Translation: Shan Ouba, Jinse Finance

Market downturn is a fact

Frankly, the current sentiment in the cryptocurrency market is extremely poor.

The S&P 500 is nearing its all-time high, the Nasdaq is soaring, gold prices have broken through $4,300, and tech stocks continue to rebound. From all traditional indicators, we are in a market environment of rising risk appetite—funds are flowing into risk assets, and investor confidence is high.

And Bitcoin? It's practically motionless. Sideways, consolidating, oscillating, dull—no word can mask the pervasive disappointment in the community. Twitter is flooded with similar anxious questions: Why are all other assets rising while Bitcoin remains stagnant? This cognitive dissonance is glaring. The Bitcoin ETF has launched successfully and continues to attract monthly inflows, institutional adoption is accelerating, the Genius Act has passed and the Clarity Act is imminent, there's been no regulatory crackdown, no major hacking incidents, and no collapse of the core narrative. All the factors that should have been at play have materialized. Yet the reality is that we watch other assets rise while Bitcoin stagnates. My increasingly close connection with the crypto community over the past few years has given me a unique perspective. I've been observing both the traditional fiat financial system and the crypto ecosystem, and I've gradually discovered a familiar pattern—one that reminds me of the traditional markets I encountered growing up in. The similarities are striking, and the differences are equally significant, but sometimes, the similarities manifest in unexpected ways. What if everyone is wrong? What if Bitcoin hadn't run into problems and had finally achieved an IPO in the traditional financial sense? A bridge connecting two worlds. My journey into the crypto space has been quite enlightening, primarily because I haven't abandoned my understanding of traditional markets, but rather examined the crypto industry from that perspective. I'm increasingly realizing that despite Bitcoin's revolutionary origins and inherently decentralized nature, the economic laws it follows are as old as capitalism itself. Early investors bear enormous risks, and if their investments are successful, they deserve substantial returns. The key is that ultimately, they need to realize these gains—they need liquidity, exit channels, and diversified investments. In traditional markets, this point is called an IPO. It's the moment when early believers cash out, founders achieve financial freedom, and venture capitalists return capital to limited partners. This isn't failure, but a sign of success. The company doesn't die in the IPO; it transforms, matures, and its shareholding becomes more diversified. Bitcoin has never experienced a traditional IPO because it doesn't have a physical company behind it. But economic laws don't disappear because of different structures; they just manifest in different forms. Revealing the Deviation from the Truth Let's talk about the current market reality. In the past, Bitcoin's movements were highly synchronized with tech stocks, closely related to liquidity and risk appetite. For years, observing the Nasdaq index could roughly predict Bitcoin's direction. However, since December 2024, this correlation has completely broken down. This has confused many – algorithmic traders and momentum investors alike are baffled. When risk assets generally rise while Bitcoin is absent, the market narrative becomes that something is wrong with Bitcoin. But from a traditional market perspective, this is exactly what happens during the IPO distribution period. When a company goes public and early investors begin to reduce their holdings, even if the overall market rises, its stock price often enters a consolidation phase. Why? Because there is a specific logic behind it: early investors are not panic selling, but rather systematically reducing their positions. They act cautiously, do not want to suppress the stock price, and are patient – ​​having waited for years, they don't mind spending a few more months ensuring a smooth reduction. Meanwhile, new investors enter cautiously. They don't chase highs, but gradually build positions during pullbacks, waiting for the distribution of shares before increasing their investment. The result is: sideways consolidation is driving everyone crazy. Fundamentals are strong, the overall market is rising, but stock prices just won't budge. Look at Circle or Coreweave—they surged initially after their IPO pricing, then entered a consolidation phase. Does this sound familiar? If Bitcoin's slump were due to macroeconomic factors, it should have fallen along with risk assets, not diverged from them. If it were truly a crypto winter, the entire industry should have experienced panic, capitulation selling, and a synchronized decline. But in reality, we're seeing a more concrete scenario: some people are systematically and patiently reducing their holdings amidst stable buying pressure. This selling signals that I've achieved my goals and it's time to exit, rather than that I'm panicking.

Increasing Evidence

Then, I received unexpected but perhaps long-overdue confirmation.

In Galaxy Digital's recent earnings call, Mike Novogratz announced that the company had sold $9 billion worth of Bitcoin for a client. $9 billion—think about that number. This isn't a retail panic sell-off, nor is it a shakeout of traders; it's an early giant in the space systematically exiting a massive position.

But they're simply taking profits, realizing gains—exactly what early investors should do when assets mature and the market has sufficient liquidity to support a large-scale exit.

The key is that this early giant is not an isolated case.

By understanding how to interpret on-chain data, the trend becomes clear: old coins that haven't moved for years (some have been dormant since Bitcoin's price was in single digits) are suddenly becoming active. It's not a sudden burst, not a panic sell-off, but a steady, planned movement since the beginning of the year (especially after summer). Addresses that accumulated Bitcoin when it was still a cypherpunk experiment are finally starting to transfer their holdings. Look at the Fear & Greed Index, and then look at social media sentiment—community morale is low, and retail investors are surrendering en masse. This is the typical emotional state that occurs when smart money distributes its holdings to weaker holders. But most people overlook one point: if you understand the current stage, this sentiment is actually a bullish signal. The Mindset of an Early Holder: Put yourself in their shoes: Suppose you were someone who mined Bitcoin in 2010, or an early investor who bought it at $100 or even $1000. You've experienced the collapse of the Mt. Gox exchange, multiple bans in China, the 2018 bear market, the COVID-19 pandemic, regulatory uncertainty, and endured over a decade of mainstream media labeling Bitcoin a scam. When almost no one believed, you chose to believe; you took the risk and ultimately succeeded—Bitcoin's development exceeded almost everyone's expectations. But what should you do now? You hold wealth that could change the lives of generations, and your life has already changed. Perhaps you're nearing retirement, your child is about to go to college, you want to diversify your investments in artificial intelligence, buy a Jeff Bezos-class yacht, start a business, or simply enjoy the fruits of years of patient waiting. Now, you can finally exit your positions without destroying the market. This is an unprecedented opportunity. For years, the market has lacked sufficient liquidity. In 2015, selling $100 million worth of Bitcoin would have inevitably led to a price crash; in 2019, selling $1 billion would have faced the same problem—the market couldn't absorb such massive selling pressure. But now it's different: ETFs provide institutional buying, large companies are including Bitcoin on their balance sheets, and sovereign wealth funds are entering the market. The market has finally matured to the point where early holders can exit large positions without causing chaos. A more crucial insight is that they chose to reduce their holdings in an environment of rising risk appetite precisely because buyers have sufficient funds at that time. When the stock market is rising, confidence is high, and liquidity is abundant, it's the best time to distribute shares. Selling during a panic will depress Bitcoin's price, while reducing holdings when other assets are strong is simply a wise business decision. This is exactly the moment the early whales have been waiting for – they don't want a specific price (that's already been reached), but rather liquidity, market depth, and the ability to truly exit. The mission is complete; Bitcoin has proven its value, and now it's time to reap the rewards. Why it's not a bear market now: I can already hear the skepticism: this sounds like you're making excuses for a bear market at the end of a four-year cycle. This skepticism is valid, so let's talk about the fundamental difference in the current situation. Bear markets are driven by fear, a deteriorating macroeconomic environment, and a loss of confidence in the core narrative. Remember 2018? Exchanges collapsed one after another, ICOs were exposed as scams, and the entire industry reeked of fraud—people sold off because they feared Bitcoin would go to zero. Remember March 2020? The global pandemic broke out, and all assets plummeted—people sold off to obtain cash for survival. But the current situation is completely different. Today, Bitcoin's fundamentals are arguably the strongest ever: the approval of ETFs, once considered impossible, has become a reality; institutional adoption is accelerating; the halving has arrived as scheduled (every four years, as precise as a clock); network security has reached new highs; hash rate has hit an all-time peak; stablecoin adoption is rising; asset tokenization is progressing; and network effects are about to bring about an explosion in trading volume—the vision of the crypto industry has finally become a reality. Despite this, everyone must remember: it's only been three years since the darkest days of the crypto industry (price crashes, fraud exposures, regulatory backlash). Altcoin prices are still 20%-50% below their then-peak, and for the past two years, Bitcoin has been the lifeline of the entire industry. Venture capitalists and hedge funds, once major investors in the crypto industry, have been devastated since the bubble burst. They are still recovering from losses in crypto and SaaS investments (impacted by the rise of artificial intelligence). The current sellers are not losing faith, but winning – that's the key difference. In a bear market, buyers disappear, and prices crash because everyone wants to exit, but no one wants to enter. But look at the reality: Bitcoin is consolidating, not crashing. Every pullback is met with buying support, and prices haven't hit new lows, but rather remained within a range. Buyers are indeed entering the market, but they are not aggressive or emotional. They are patiently building positions, waiting for the distribution of shares to be completed. This is exactly the same pattern as the lock-up period after a large IPO: the stock doesn't crash, but consolidates; early investors reduce their holdings, and new long-term holders build positions; equity transfers from visionaries to institutions. Lessons from Traditional Markets To understand Bitcoin's current stage, look at the post-IPO performance of great tech companies. Amazon went public in 1997 at $18 per share, rose to $100 within three years, and then traded sideways for the next two years—even as the internet industry continued to grow. Why? Because early investors and employees finally gained liquidity and began to reduce their holdings. Many who believed in Amazon at $1 cashed out at $100. Their choice was correct, after all, they reaped a 100-fold return. But the stock needs to absorb this selling pressure before it can continue to rise. After Google's IPO in 2004, its stock price consolidated for nearly two years; Facebook (now Meta) experienced the same in 2012-2013—lock-up period expiration triggered significant volatility and sideways trading. This is normal, healthy, and a sign of success. The company won't decline at this stage, nor will the assets perish. What truly happens is a power transition—early believers pass the baton to a new generation of holders, who buy in at higher prices and with different investment horizons. From cypherpunks to institutions, from libertarian idealists to corporate finance departments, from staunch believers to trustees managing billions of dollars. It's not about good or bad, it's simply evolution—this is the natural life cycle of successful assets. The transfer of power is significant and deserves attention. Bitcoin was born from an ideology created by cypherpunks who believed in decentralization, sought freedom from government control, and trusted mathematical certainty over institutional trust. Early adopters were rebels, non-mainstream groups, and visionaries who saw potential others missed. Today, these people are reaping the rewards and are passing the baton. The entities that take the baton are less concerned with ideology and more focused on returns. BlackRock doesn't care about being its own bank; it only cares about portfolio diversification and risk-adjusted returns. Is this a loss? In some ways, yes. Bitcoin may never again possess the aggressive dynamism of its early days; the era of 100x returns in a year may be over. As the holder structure becomes more dispersed, the volatility that once created enormous wealth will also diminish. But this is also a victory—Bitcoin has survived long enough to become boring; its success has been so thorough that early believers can truly cash out and leave; its value has been proven so that even the world's most conservative financial institutions have begun buying in. More importantly, from a market structure perspective, this distribution of tokens is highly bullish in the long run. Why Dispersed Holding is Better than Concentrated Holding: Observing traditional markets has taught me a principle applicable to Bitcoin: concentrated holding is fragile, while dispersed holding possesses antifragility. When Bitcoin was primarily held by a few thousand early adopters, the market was inherently volatile—a few wallets could significantly impact the price, and one person's sell decision could trigger a market-wide ripple effect. Price fluctuations were extreme simply because of the unstable holder structure. However, as holdings become more decentralized—with millions of investors holding small positions rather than thousands holding massive positions—the market structure becomes more stable. Consider this: if 100 people hold 50% of the supply, and one of them decides to sell, 0.5% of the total supply floods the market, inevitably affecting the price; but if 1 million people hold 50% of the supply, even if 10,000 decide to sell, the total selling pressure remains 0.5%, but it will be spread across thousands of transactions at different times, prices, and platforms, diluting the impact. This is exactly what happens after an IPO: the initial shareholder group is small (founders, early employees, venture capitalists), and after the IPO and lock-up period, shareholding becomes more diversified—the number of holders grows from hundreds to millions, including index funds, retail investors, and institutions. The reduced stock volatility is not due to a decline in the company's attractiveness, but rather to a more robust holder structure. Bitcoin is currently undergoing this transformation. Early whales that once single-handedly influenced the market are now reducing their holdings to thousands of institutional investors through ETFs, millions of retail investors through exchanges, and corporate finance departments and pension funds. Every Bitcoin that moves from centralized to decentralized accounts makes the network more resilient, the price more stable, and the asset more mature. Admittedly, this means that the days of 10x price increases may be history, but it also means that the risk of a catastrophic crash triggered by a concentrated sell-off is reduced. A decentralized ownership structure is key to distinguishing speculative assets from durable stores of value, and is essential for Bitcoin to evolve from a magical internet currency into a global monetary asset. Future Timeline: If this view is correct (and I believe the evidence strongly supports this), what should investors expect? First, patience is key. IPO distribution periods typically last 6-18 months, and the current process may have been underway for months but is not yet complete. Furthermore, Bitcoin's cycle is faster than fiat assets; in Bitcoin timeframes, we may have already far exceeded 6 months. Currently, sideways movement is expected to continue, and Bitcoin will continue to disappoint by not rising alongside risk assets. Market sentiment may remain subdued for some time—without clear signals, and an upward move could suddenly occur even with existing positive factors. Second, reduced volatility. As holdings become more diversified, the dramatic price swings of previous cycles will moderate – the once common 80% drop may become 50%, and a 50% drop may become 30%; a 10x increase may become 3x. This will disappoint speculators seeking high risk, but reassure risk managers. Third, the correlation with traditional risk assets may recover after the distribution period. Once early whales have completed their selling and holdings are sufficiently diversified, Bitcoin may resume following market sentiment, albeit with lower volatility and greater stability. Fourth (a crucial point): Market sentiment will only improve after the distribution of tokens is largely complete. Current frustration stems from a lack of understanding of the current phase – they are waiting for Bitcoin to catch up with the stock market's gains and fear the end of the four-year cycle. Be patient; once the heavy selling pressure dissipates and institutions patiently accumulate early supply, the future will become clear. The exact timeline is unpredictable, but by observing similar patterns in traditional markets, current trends can be identified. The maturation of asset classes follows this evolution. In the early days of the internet, companies founded by believers, though lacking business models, firmly believed that connectivity would change the world. They were right; many became extremely wealthy. Then came the bursting of the dot-com bubble and industry consolidation, a shift in equity ownership, and dreamers giving way to doers. The internet didn't die; instead, it truly realized its vision—just over a longer timeline than the early hype. Personal computers, mobile phones, cloud computing, artificial intelligence—all transformative technologies follow a similar trajectory: early believers take enormous risks, reap substantial rewards upon technological success, and ultimately realize their gains; then they enter a transitional period, seemingly a failure, but actually a path to maturity. Bitcoin is evolving along the exact same path. Early holders took the risk when Bitcoin could have gone to zero, endured ridicule, regulatory uncertainty, and technical challenges, built the infrastructure, survived the Mt. Gox collapse, persevered in the scaling debate, and actively promoted the technology when no one listened. They succeeded—Bitcoin is now an asset with a market capitalization exceeding $1 trillion, recognized by the world's largest financial institutions. Now, they are reaping the rewards. This is not the end of Bitcoin, nor even the beginning of its end, but rather the end of its beginning. From speculation to institutional holding, from cypherpunk experiments to a global asset, from centralized to decentralized holding, from extreme volatility to stability, from revolutionary to fundamental. The Opportunity During the Distribution Period What gives me confidence is that I've seen it all. I understand how traditional finance works, I'm familiar with IPOs, lock-up periods, and institutional accumulation models; I also understand the crypto community—the hopes, the disappointments, and the different beliefs this time. Sometimes it is different, sometimes it isn't. The current situation with Bitcoin isn't different, but rather a manifestation of the economic laws that have dominated the market for centuries in a new context. The gloom everyone feels isn't a sign of failure, but rather a sign that we're in the most difficult stage of the journey—early believers cashing out, and late believers feeling they've missed an opportunity. This stage is uncomfortable and frustrating, but essential. The key insight that gives long-term investors confidence is that once the distribution is complete, Bitcoin's structure will be stronger than ever before. As holdings are dispersed from thousands of early whales to millions of investors, the asset becomes more resilient, less susceptible to manipulation by a single entity, more stable, more mature, and better able to absorb large sums of money without triggering drastic fluctuations. The IPO is nearing its end, and early whales are reaping the rewards. The final form of Bitcoin will prepare for the next phase—no longer a speculative tool for huge returns, but a fundamental monetary asset with a dispersed and stable holder structure. This may sound boring to those who bought in at $100, dreaming of it reaching $10 million. But for institutions managing trillions of dollars, companies seeking balance sheet diversification, and nations exploring reserve assets, boredom is exactly what they want. The thrill of concentrated holding is being replaced by the enduring power of dispersed holding, with early believers passing the baton to long-term holders with different motivations who bought at higher prices. This is what success looks like; this is Bitcoin's IPO. Once this process is complete, the distribution of tokens is finished, and holdings are sufficiently dispersed, true institutional adoption can officially begin—because the market can finally absorb large amounts of capital without the pressure of large concentrated holdings waiting to exit. The current consolidation is frustrating, sentiment is poor, and the divergence from risk assets is perplexing. But Bitcoin's fundamentals have never been stronger, and this structural shift from concentrated to dispersed holdings is the necessary step for it to evolve from a revolutionary experiment into a lasting monetary asset. Early whales are experiencing their own liquidity event; let them be—they deserve it. The Bitcoin they left behind is stronger, more dispersed, and more resilient than when they first held it. This is not a reason for despair, but rather an opportunity to build a position. Bitcoin's volatility is the price it pays in its infancy; its stability will be proof of its maturity.