Friday, July 1

Holders retain more than 80% of bitcoin money, says Glassnode

Key facts:
  • BTC held by short-term holders decreased to 3 million this year.

  • BTC inventories on exchanges went from 2.62 million to 2.57 million.

Funds in the hands of long-term (LTH) and short-term (STH) bitcoin holders will culminate this year at 16.34 million BTC, which represents 86.45% of bitcoin circulating. This is one of the main conclusions of the latest report from the analytical firm Glassnode on the bitcoin market and cryptocurrencies. This report also notes that the remaining 13.55% comprises bitcoin inventories on exchanges, which end this year at 2.56 million BTC.

LTHs end 2021 with 13.33 million BTC, after incorporating 1.846 million BTC during the year, which means that they increased their funds by 13.85%, according to to study by Glassnode. In the case of STHs, the opposite trend occurred, since the funds that controlled decreased 1.43 million BTC, to end this year with 3.03 million BTC.

The following graph shows the evolution of currency in the hands of LTH and STH, as well as the curve of the circulating supply of bitcoin. It is observed in the graph that for the LTH a relative minimum was registered at the beginning of the year, while the BTC in the hands of the STH showed a maximum. The sum of the BTC of both cohorts makes up the sovereign supply curve (dark blue), according to the report.

Distribution of bitcoin supply in 2021. Source: Glassnode.

The accumulation of BTC (light blue) by the LTHs is evident in much of 2021, while the bitcoin funds in the hands of the STH (purple) decrease in a complementary way. These short-term holders they would have sold part of their BTC as part of profit taking.

The difference between the circulating bitcoin (gold) and what is retained by both segments of holders, gives as a result the total of BTC inventories in the exchanges. These inventories end the year at 2.56 million BTC.

This transfer of funds between short-term and long-term investors, which occurred amid several all-time highs, is described in the study as “a medium-term consolidation and a period of modest accumulation.” This scenario is typical of a bearish phase, of periods “of redistribution of coins from weak hands to holders with greater long-term conviction,” the research highlights.

Modest decline in BTC inventories on exchanges

In terms of BTC inventories on exchanges, a modest decline can be seen for the year. At the beginning of 2021, there were 2,623 million BTC on exchanges, and Inventories decreased 2.6% in the year, with which they remain in 2.56 million BTC, affirms the report.

At the time of writing this article, the price of BTC is USD 47,984, which represents an appreciation in the year of 63.2%. “Despite the volatility, 2021 can be described as a year of macro consolidation with high temporality,” the report concludes.

In recent days, the price of bitcoin has been fluctuating around USD 47,000, which collapses the predictions that since the beginning of the year pointed to prices above USD 100,000, as we reported in this medium.

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