Blockchain analytics firm Glassnode recently highlighted an intriguing market trend regarding Bitcoin (BTC). Addresses that have held their coins for at least 155 days, often characterized as “HODLers” in the crypto community, now hold three-fourths of the entire circulating supply. These accounts witnessed an increment of 62,882 BTC, approximately $1.83 billion, this month, reaching a record of 14.52 million BTC. This surpassed the previous record witnessed on May 21.
The total circulating supply refers to the aggregate amount of coins accessible for active trading in the market – currently sitting at approximately 19.437 million BTC. Therefore, these long-term holders possess around 75% of supply in circulation. As pointed out by Glassnode, this suggests a market tendency tilted towards ‘HODLing’ among seasoned investors.
However, the crypto market narrative paints a more complex story. On one side, there is a notable surge in the BTC residing in wallets of investors who hold onto their investments for long periods, implying a decrease in sell-side pressure as the stake of ‘HODLers’ continues to escalate. In fact, accounts deemed as ‘illiquid entities’, network participants with negligible spending history, are also accumulating more BTC. Their numbers have surged by more than 90,000 BTC this month.
Still, the surge in the share of long-term holders represents limited liquidity in the market. While it suggests an amplified conviction among investors to hold onto their digital assets, the reduced circulation concurrently decreases the coin’s availability for trade. In an optimist’s viewpoint, this could potentially drive up BTC’s price due to escalated demand and a limited supply. On the skeptic’s side, however, it might increase price volatility, especially if larger holders decide to sell at once.
In essence, while the increased concentration of BTC in the hands of long-term holders showcases the investor faith in the coin, it also underscores the increased susceptibility to potential price swings. Consequently, this market dynamic necessitates investors to exercise caution while navigating the crypto landscape. Whether this signifies a promising or perilous path remains to be seen. Please note that this is based on data provided by Glassnode – following links may result in commissions for CoinDesk.
Source: Coindesk
