"Major Chip Turnover" Nearing the End! K33 Analysis: Bitcoin is Expected to Return to Buyer Dominance by 2026

Long-term Bitcoin holders have launched a nearly two-year-long sell-off wave, which seems to be finally coming to an end. According to a report released by research firm K33 Research, the structural selling pressure of Bitcoin is nearing exhaustion. As the market gradually stabilizes, it is optimistic that next year will see a market dominated again by buyers.

Vetle Lunde, Head of Research at K33 Research, stated that from 2024 onwards, the number of long-term unspent transaction outputs (UTXOs), i.e., Bitcoin held for over 2 years without movement, continues to decline. During this period, approximately 1.6 million Bitcoins (worth about $138 billion at current prices) have re-entered circulation, indicating that the selling pressure from early holders is not a short-term phenomenon but a continuous release.

Vetle Lunde pointed out that such large-scale movements are not simply wallet upgrades or technical adjustments but genuine “whale cash-outs.”

He added that although some early addresses have been reactivated, possibly related to the transition of Grayscale Bitcoin Trust (GBTC) from a closed-end fund to a spot ETF, wallet consolidation, or address upgrades for security reasons, these reasons are still insufficient to fully explain the large amount of Bitcoin re-entering circulation. A more plausible interpretation is a sustained wave of chip distribution (large holders selling chips to the market).

Changes in the supply of Bitcoin with a coin age of over 2 years. (Data source: K33 / CoinMetrics)

Chip Distribution Wave Reshapes Bitcoin Holding Structure

K33’s report indicates that 2024 and 2025 have become the second and third largest “long-term supply awakening years” in Bitcoin history, only after 2017. However, the nature of this wave is very different.

Vetle Lunde reviewed that the chip turnover in 2017 was mainly driven by the ICO (Initial Coin Offering) boom and speculative trading of competing coins; in contrast, the selling behavior over the past two years has been more connected to the deep liquidity created by U.S. Bitcoin spot ETFs and large corporate buy-ins. Under these market conditions, long-term holders have been able to gradually realize profits supported by ample liquidity.

Total Bitcoin re-entering circulation with a coin age of over 2 years each year. (Data source: K33)

K33 also listed several large transactions as evidence, including:

• July this year: Galaxy Digital completed an OTC trade of 80,000 Bitcoins;
• August this year: A “whale” exchanged 24,000 Bitcoins for Ethereum;
• October to November this year: Another large holder sold about 11,000 Bitcoins.

The report points out that similar behaviors are quite common among other large holders, which is likely a key factor behind Bitcoin’s relatively poor performance this year.

K33 states that just this year, about $300 billion worth of Bitcoin (held for over a year) has re-entered circulation. Vetle Lunde said that with institutional liquidity flooding in, long-term holders can realize profits in the “six-figure USD price range,” which not only reduces chip concentration but also establishes a new price benchmark for large-scale circulation.

Value of Bitcoin supply re-entering circulation in USD. (Data source: K33 / Checkonchain)

Cooling Selling Pressure Expected, Watch for Asset Rebalancing Effects

Looking ahead, K33 expects that seller pressure may gradually ease. Vetle Lunde stated that over the past two years, about 20% of Bitcoin supply has been reawakened. As this long-term selling pressure is gradually digested, on-chain seller strength will approach saturation.

He further predicts that the supply of Bitcoin with a coin age of over two years is expected to end its long-term decline and rebound to levels above the current approximately 12.16 million Bitcoins by the end of 2026. As early holders’ selling gradually concludes, the market will gradually return to a buyer-dominated structure.

K33 also reminds that as this quarter comes to an end, the market may experience technical effects from portfolio rebalancing. Vetle Lunde pointed out that historical data shows that Bitcoin tends to move in the opposite direction at the start of a new quarter compared to the previous one.

Since Bitcoin significantly lagged other asset classes in Q4, asset management institutions with fixed allocation ratios may see additional capital inflows from rebalancing operations at the end of this year and early next year, similar to what occurred from late September to early October this year.

Bitcoin’s performance at the start of a new quarter often opposes the trend of the previous quarter. (Data source: K33)

Although historical data shows that large-scale long-term supply awakening usually occurs near “market tops,” Vetle Lunde argues that as Bitcoin penetrates mainstream finance through ETFs and advisory platforms, even if short-term volatility persists, the long-term demand fundamentals are more solid than ever before in any previous cycle.

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