Institutional Shorts, Crypto Treasury Selling & Whale Distribution, What They Signal for Alt‑season Cycles
The whole market is a mess, people are losing their minds, and morale is, well, its in the gutter. So for the very few brave souls who decide to read this, I will give my 2 cents, for whatever that’s worth.
The 2024‑25 narrative and market has produced unusual cross‑currents.
Artificial‑intelligence stocks like Nvidia (NVDA) and Palantir (PLTR) have become popular momentum trades, yet some prominent investors are betting against them and in a big way.
At the same time, many digital‑asset treasury (DAT) companies, public firms that hold crypto in their treasuries, are grappling with falling share prices and discounts to net asset value (NAV), and as we know, that causes problems.
Meanwhile, back at the crypto ranch, Satoshi‑era whales (long‑time Bitcoin HODLers) and some large miners have been moving coins to exchanges and selling, sparking fears of a mass exodus.
Some of these behaviours in 2025 need to be compared to earlier crypto cycles to understand whether they are signs of an impending alt‑season or part of a broader market maturation.
Who is shorting Nvidia and Palantir?
Michael Burry’s puts on AI stocks
Michael Burry’s hedge fund (if you don’t know who he is, go watch The Big Short and come back), Scion Asset Management, disclosed large put option positions against Nvidia and Palantir in 13F filings for Q3 2025.
The size of the positions (US $1.1 billion in notionally hedged shares) attracted headlines, however, financial media emphasised that 13F filings do not reveal whether the puts hedge long positions or are directional bets, and Burry has previously used puts as short‑term hedges.
According to Nasdaq’s analysis, Burry’s wagers may reflect his view that AI‑chip stocks have extremely high price‑to‑sales multiples reminiscent of the dot‑com bubble, Nvidia’s P/S ratio exceeded 40 and Palantir’s was around 17. So you see where this could be going.
The Motley Fool (normally a pretty bloody great read) noted that investors should not assume Burry is permanently bearish, his put options could protect gains in an overextended market.
Other high‑profile sellers and hedgers
- Masayoshi Son (SoftBank Group), Reuters reported that SoftBank sold about US $5.8 billion worth of Nvidia stock in 2025 to finance a US $50 billion investment in AI start‑ups. This sale is not an outright short but demonstrates profit‑taking in a richly valued AI leader. I’ve seen this guy in direct action through Grab and he is known for making big calls, not always good ones either, but big nonetheless.
- Peter Thiel’s Founders Fund — Reuters revealed that the fund exited its remaining 537,742 Nvidia shares (US $100 million) in Q3 2025, fueling speculation that venture investors see an AI valuation peak, and a big frothy top. Thiel’s team signaled that the AI boom might be overextended.
- Boaz Weinstein’s Saba Capital — Saba has been selling credit default swaps (CDS) protection on large technology companies such as Microsoft and Oracle to banks concerned about AI‑driven debt risk. The strategy, isn’t exactly a direct short but it implies hedging against the possibility that heavy investment in AI could strain corporate creditworthiness.
So there are some pretty sophisticated investors hedging or taking profits from the AI trade. None of these positions necessarily signal a broad collapse, but they reflect concerns that the AI rally may have run ahead of fundamentals.
Digital‑asset treasury companies selling Bitcoin/Ether
Digital‑asset treasury (DAT) companies are public corporations that hold large reserves of Bitcoin, Ether, Solana (soon to be Avalanche too) and other tokens in their treasuries. They typically fund purchases through private placements or securities (PIPEs, god love these names and acronyms) and then trade at a premium to their crypto holdings. During the 2024–25 cycle, hundreds of companies adopted this model, following the blueprint of MicroStrategy. But you guessed it, this boom created vulnerabilities. By the time a lot of these got passed, things had started to move in the wrong direction.
Structural vulnerabilities of DATs
The implosion of many DATs stems from the way they are financed:
- Trading at discounts to NAV — When crypto prices drop, DAT shares often fall below the value of their token holdings. So in layman’s terms discounts create pressure on boards to sell crypto holdings in order to repurchase stock or reduce liabilities, forcing sales during market stress. But I keep getting asked, if they don’t buy spot why would they sell spot? Think about that for a moment.
- Leverage and margin calls — Many DATs borrow against their tokens. In a market decline, falling token prices trigger margin calls and forced liquidations. All of this hoo-ha can create a liquidity spiral where simultaneous selling across multiple DATs accelerates declines.
- Groupthink and correlated positions — Because most DATs buy similar assets (BTC, ETH, SOL), they face the same margin calls. What you get is a situation where DATs often buy and sell at the same time, when share prices fall and creditors demand collateral, they sell crypto to raise capital, intensifying price drops. A handful of leveraged players selling into a thin market can cause a cascade. Binance and their APIs don’t help.
Evidence of DAT selling in 2025
At this time, many DATs are under pressure:
- A CCN report described the October 2025 flash crash as a “DAT death spiral.” More than 200 companies saw stock prices plunge 80–95%, many had to tap emergency credit lines and sell BTC or ETH at losses to meet margin calls. To meet margin calls? We always knew crypto and stocks would merge but most thought the other way. They are some huge numbers.
- If regulators or creditors force DATs to deleverage, multiple forced sales could occur almost simultaneously, causing a liquidity crisis. Makes you wonder if anyone thought this stuff through before acting.
- Some DATs, however, continued to accumulate. VanEck’s October 2025 recap shows that DATs added 4 bps of BTC supply, 59 bps of ETH and 39 bps of SOL during the month, meaning that while some were forced sellers, others BTFD.
Data and evidence suggests that DATs amplify volatility, they accumulate in rising markets but can become forced sellers when markets turn. This dynamic did not exist in earlier crypto cycles because DATs were rare, they were a product of this 2024–2025 era.
Satoshi‑era whales and miners selling Bitcoin
Large whales moving coins to exchanges in 2025
Several sources report that whales who mined or acquired Bitcoin in its early years have been transferring large amounts to exchanges:
- 99Bitcoins tracked two whales, one known as BitcoinOG (also called 1011short) and another wallet owned by Owen Gunden, that collectively deposited around 13,000 BTC (US $1.48 billion) to Kraken, Binance, Coinbase and Hyperliquid between October 1 and early November 2025. Miners also moved 210,000 BTC during the October crash.
- Bloomberg/Reuters reported that long‑term holders sold approximately 400,000 BTC (US $45 billion) in a single month, leaving the market ‘dangerously unbalanced’.
- Digital Currency Traders wrote that a dormant whale from 2011 shifted 80,000 BTC (US $9.6 billion) and another moved US $4.6 billion, noting that whales with over 10,000 BTC have been gradually selling since 2017 while mid‑tier wallets accumulated 218,570 BTC in 2025.
- Bitbo (what a name, must be for Bitcoin Bimbos) documented a wallet that once held 8,000 BTC and has been steadily selling since 2011, reducing its holdings to 3,850 BTC. Analyst Willy Woo observed that whales with more than 10,000 BTC have been net sellers since 2017.
- AMBCrypto noted that more than 250,000 BTC dormant for seven years or more were moved in 2024, rising to 270,000 BTC by October 2025. The breach of the US $100K level prompted long‑term holders to realise profits, and the 3 to 5 year cohort had been selling more consistently than in previous cycles.
Just because there are large movements to exchanges do not always mean immediate selling, but on‑chain analysts often see deposits as precursors to sales. The scale of these transfers suggests that early whales are taking advantage of higher prices and deeper liquidity to de‑risk. I mean for years these guys haven’t had the liquidity to sell these types of volumes. Imagine being stuck being a Billy Bag-holder with 10s of Ks of Bitcoin, for all this time. Worth the wait right?
Rationale for whale selling
On‑chain analysts emphasise that whale distribution is not necessarily bearish:
- Market maturation and liquidity — Analysts like Darkfost (guess I spelled that right) argue that old whales are selling because the market now offers sufficient liquidity through ETFs, DATs and government participation. Selling by long‑term holders redistributes coins to new investors and indicates a maturing market rather than capitulation. After initial distribution, whales resumed accumulation, suggesting new capital entered the market.
- Profit‑taking and ideological shifts — Some whales may be cashing out after a decade of holding. Digital Currency Traders suggests reasons include profit‑taking, ‘HODL fatigue,’ generational wealth transfers and changing views on Bitcoin’s ideology, because lets face it, most people are ‘in it for the tech’.
While the amount of BTC moved in 2025 is unprecedented, the underlying reasons are largely consistent with typical market rotations seen in previous cycles.
Comparison with previous alt‑seasons
Alt‑seasons in 2017, 2021 and (not really and alt-season but) early‑2024
Alt‑seasons refer to periods when altcoins outperform Bitcoin. An analysis of past cycles reveals common patterns:
- 2017 boom — The 2017 alt‑season occurred shortly before Bitcoin’s all‑time high. The narratives of blockchain revolution and ICO speculation drove huge rallies in Ethereum, Ripple (XRP) and Litecoin, many altcoins subsequently lost more than 90% of their value in the 2018 crash.
- 2021 DeFi/NFT wave — The 2021 alt‑season was powered by DeFi protocols and NFTs. Tokens like Solana, Aave and Uniswap, along with meme coins, surged but later crashed after Bitcoin and Ether peaked.
- Mini alt‑seasons in 2024 — Trump’s pro‑crypto rhetoric and the approval of spot ETFs in early and late 2024 spurred mini rallies in tokens such as XRP, SOL and HBAR, but the gains were short‑lived and we never had a tradition alt-season, yet.
If you look at all these periods, alt‑season peaks typically coincided with retail euphoria, high leverage and new narratives (ICOs, DeFi, NFTs). They were usually followed by steep corrections.
How the 2025 cycle differs
The current cycle presents structural differences:
- Institutional participation & derivatives dominance — By mid‑2025, centralised exchanges processed or wash traded over US $14 trillion in spot volume, with Binance holding 40% market share. Crypto derivatives have exploded, the notional value of crypto derivatives was estimated at US $20–28 trillion in 2024, dwarfing the spot market. Don’t see any problems at all with that, my god. Institutional investors use basis trades, buying spot via ETFs and shorting futures to lock in the contango premium. This means institutions often do not simply ‘buy and hold’, they employ hedging and arbitrage strategies. Yet we have always been told that they will be diamond hands.
- Corporate treasuries and ETFs as major buyers — Corporate treasury companies like MicroStrategy (now “Strategy”) hold more than 859,000 BTC (4 % of supply), according to Reuters, and may be larger buyers than traditional institutions. However, these companies are leveraged, a drop below US $90K could leave half of them underwater. Spot Bitcoin ETFs have attracted billions but remain dominated by retail investors (institutional ownership is less than 5%). So where are the retail investors? Many aren’t on socials anymore and for bloody good reason. What a toxic world crypto social media is.
- Liquidity depth encourages whale distribution — The availability of spot ETFs, derivatives and DATs provides deeper liquidity that allows large holders to exit without collapsing the market. Whales have been selling since 2017 and accelerated sales in 2025, however, on‑chain analysts argue this is a sign of market maturation. Love to know what you think too, rather than just the experts. Leave some comments below.
- DAT feedback loop — DATs, a new phenomenon, amplify volatility. When their share prices fall below NAV, boards may sell tokens to defend valuation, causing additional downward pressure. This can create cascading liquidations reminiscent of the 2021 DeFi liquidation cascade, but the players are now public corporations. This worries me more than a lot of other things in life atm to be honest.
Is the current whale and DAT selling a prelude to an alt‑season?
There are parallels and differences between the current environment and earlier alt‑seasons:
The 2025 cycle features more sophisticated participants and derivative strategies. This may limit explosive alt‑season rallies but also reduces the likelihood of a catastrophic crash. Whale selling and DAT deleveraging are part of a redistribution process. The relationship between forced selling (by DATs) and institutional hedging could create volatility spikes, but the market is arguably more resilient due to deeper liquidity. Just got to watch out for the degenerate leverage junkies.
Implications for investors and Influencers/CT analysts
- AI stock shorts are not necessarily “doom trades.” Burry’s puts and SoftBank’s sales are hedges or profit‑taking in a richly valued sector. They illustrate caution rather than a conviction that AI will collapse. This nuance is important when discussing an “AI bubble.”
- DATs matter because they can become forced sellers. Unlike microcap crypto firms in past cycles, DATs are publicly listed and can influence markets. Their leverage and corporate governance can turn a sell‑off into a feedback loop. Monitoring DAT balance sheets and discount‑to‑NAV metrics could help anticipate volatility.
- Whale distribution is part of market rotation. Satoshi‑era whales are finally realising profits after a decade, enabled by ETFs and deep liquidity. This distribution may precede alt‑coin rallies as capital rotates into newer narratives but does not guarantee a blow‑off like 2017. Keep an eye on the magnitude of exchange inflows to gauge selling pressure.
- Alt‑season drivers are evolving. Institutional participation, derivatives and real‑world asset tokenisation may generate new alt‑season narratives. Yet hedging and arbitrage strategies could suppress extreme price swings, leading to longer, less explosive cycles. Influencers and CT analysts should focus on structural changes, such as basis trading and corporate treasury dynamics, rather than only price charts. As many of you know, I am not a massive fan of charts alone, and there are fundamental reasons to move away from them as a lone indicator now.
Closing Out…..
Evidence from 2025 shows that some prominent investors are shorting or selling AI stocks like Nvidia and Palantir because they believe valuations are stretched and are hedging against potential downturns. In crypto, digital‑asset treasury companies have emerged as major players, their leverage and discounts to NAV can force them to sell BTC or ETH during downturns, potentially intensifying volatility. Satoshi‑era whales and miners have moved hundreds of thousands of BTC to exchanges, signaling profit‑taking rather than panic. When comparing this environment with previous alt‑seasons, we see deeper liquidity, institutional dominance, and new systemic risks. Alt‑season cycles may still occur, but they will likely be shaped by institutional hedging, the behaviour of DATs, and the distribution of long‑term holders. Influencers and analysts should highlight these structural shifts when analysing market cycles.
For me, I’ve been saying for 10 years that this will be the big one before we see normal trading patterns akin to stock markets, will it still come? Will we have one explosive rally prior? If we consider all the factors, what do you think?
Institutional Shorts, Crypto Treasury Selling & Whale Distribution, What They Signal for Alt‑season… was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.