Key Takeaways
How are Bitcoin holders responding to the recent price decline?
Glassnode’s Hodler Net Position Change indicates a massive distribution (selling), while Nexo platform data shows that Bitcoin consistently represents 53-57% of collateral.
Why would holders choose to borrow instead of sell during a downturn?
Borrowing against Bitcoin allows holders to access liquidity without triggering capital gains taxes. It also helps maintain their position for potential future appreciation.
Bitcoin’s decline from over $100,000 to under $90,000 in late 2025 has exposed a fundamental divide in how holders respond to downturns: some are capitulating, while others are doubling down through strategic borrowing.
The sellers: Heavy distribution underway
Glassnode’s Hodler Net Position Change metric paints a stark picture. Red bars dominate the chart throughout 2025, indicating long-term holders are actively distributing their Bitcoin.
Source: Glassnode
The selling intensified dramatically in late November, with net position changes plunging beyond -60,000 BTC—one of the heaviest distribution periods in recent memory.
This behavior follows a familiar pattern: as price drops, holders who bought near cycle tops or those needing immediate liquidity choose to exit positions, creating sustained selling pressure.
The borrowers: conviction through leverage
Yet platform data from CryptoQuant and Nexo tells a contrasting story.
Despite the price volatility and heavy on-chain distribution, Bitcoin has maintained a remarkably stable 53-57% share of total collateral on the lending platform throughout 2025.
Source: CryptoQuant
As of July 2025, BTC accounts for 54.3% of all collateral—essentially unchanged from January’s 53.8%.
This reveals a sophisticated subset of holders employing a fundamentally different strategy. Instead of selling Bitcoin when they need cash, they’re using it as collateral to borrow stablecoins or fiat currency.
Why the Bitcoin strategy split matters
The divergence reflects more than just different risk tolerances—it reveals access to financial tools and long-term conviction levels.
Holders who borrow against Bitcoin:
- Avoid triggering capital gains taxes that come with selling
- Maintain their BTC position for potential future appreciation
- Can access immediate liquidity without exiting the market
- Bet that long-term Bitcoin gains will exceed their borrowing costs
This mirrors how traditional wealth operates. Wealthy individuals don’t sell their homes when they need cash; they take home equity loans.
They don’t liquidate stock portfolios—they use margin loans. Bitcoin is increasingly being treated the same way: as a store of value to leverage, not liquidate.
What this signals for the market
The split reveals two narratives playing out simultaneously:
Macro pressure: Heavy distribution from traditional holders creates genuine selling pressure, evident in Bitcoin’s price decline to the $80-90K range.
Structural support: A subset of sophisticated holders refuses to sell, instead choosing leverage—removing supply from circulation and potentially setting up for supply shock if price recovers.
The holders who chose borrowing over selling view current prices as temporary. They believe Bitcoin’s long-term trajectory remains intact. Whether they’re right will determine if this strategy proves genius or reckless.
The data shows that access to lending platforms may be creating a new class of “unshakeable” holders willing to weather volatility through strategic leverage rather than capitulation.
