Bitcoin’s network saw the number of holders decline by 245,000 in the five days leading up to May 9, the fastest rate of retail exits in nearly two years, as the price dropped below $80,000.
The on-chain data, reported by analytics firm Santiment, shows the total number of wallets holding Bitcoin fell to 58.88 million. The decline in holders coincided with a 1.34% price drop over 24 hours, which saw Bitcoin trading at about $79,840 and its market capitalization shrink by $21.5 billion to $1.6 trillion, according to market data.
Analysts are now closely watching the $75,000 price level, which represents the breakeven point for investors who entered the market one to three months ago. A drop below this level could signal a more significant structural breakdown, while a successful rebound could confirm a healthy correction. The recent selling pressure intensified as the price neared a major liquidity zone around $88,880.
While the drop in smaller, retail-sized wallets suggests some panic or profit-taking, the broader market is seeing increased integration with traditional finance. This exodus of short-term traders contrasts sharply with the development of new products that allow long-term holders to use their assets without selling.
A significant development in crypto's real-world utility is the imminent launch of crypto-backed mortgages. Government-sponsored enterprise Fannie Mae is set to begin accepting Bitcoin as collateral for conventional home loans in a partnership between mortgage provider Better and crypto platform Coinbase.
This allows Bitcoin holders to take out a loan for a down payment, pledging their crypto as collateral instead of selling it and incurring a taxable event. For example, a pledge of $250,000 in Bitcoin could secure a $100,000 down payment loan. According to Vishal Garg, CEO of Better, the program is a response to the 41% of their customers who previously failed to qualify for a home purchase due to a lack of down payment funds.
This "Buy, Borrow, Die" strategy, long used by the wealthy to finance lifestyles without selling highly appreciated stocks, is now becoming available to millions of crypto investors. It signals a maturation of the asset class, where digital assets are increasingly treated like traditional stores of wealth that can be collateralized for real-world use.
This article is for informational purposes only and does not constitute investment advice.
