Long-Term Investors Hold Majority Stake: Over 76% of Bitcoin Owned by HODLers

Bitcoin is experiencing a significant shift in ownership dynamics, captivating both seasoned investors and newcomers to the cryptocurrency market.

Recent data from Glassnode, an on-chain analytics firm, reveals an unprecedented scenario: a vast portion of the available Bitcoin supply is now held in long-term storage. Long-term holders (LTHs) currently command over 76% of the total Bitcoin supply, a historic high that signifies a remarkable trend in the cryptocurrency’s lifecycle.

Charles Edwards, the founder of Capriole Investments, a quantitative Bitcoin and digital asset fund, noted this milestone on October 18. He highlighted the significance of this achievement, emphasizing that the increased presence of LTHs in the market has resulted in a scarcity of available coins for other participants. This scarcity, driven by the reduced liquid supply due to LTHs holding onto their Bitcoin, creates a scenario where fewer coins are available for trading. Consequently, this scarcity has a direct impact on market dynamics, potentially leading to price appreciation.

Examining the trend, it becomes evident that LTHs have steadily increased their exposure to Bitcoin since mid-2021. Despite fluctuations in demand for Bitcoin, the overall trajectory remains clear. Edwards pointed out that while the demand for Bitcoin has indeed risen since 2015, the reduced supply amplifies the supply-demand imbalance, putting upward pressure on prices. This situation, where Bitcoin’s supply is constricted heading into a halving event, is unprecedented and further intensifies the potential for price appreciation.

Conversely, short-term hodlers (STHs), or speculators, represent the opposite end of the spectrum. Their behavior, closely monitored by market observers, has added intrigue to Bitcoin’s price dynamics. The realized price of the STH cohort, indicating the price at which all STH-owned coins were last moved, currently hovers just below $27,000. Breaking above this level has been a crucial bullish signal for Bitcoin, according to market analysis.

This intriguing balance between long-term holders and short-term speculators continues to shape Bitcoin’s market landscape. With Bitcoin holding strong support at $28,000 after reaching two-month highs, the cryptocurrency market is witnessing a dynamic interplay between different investor profiles. This complex yet fascinating interaction underscores the evolving nature of Bitcoin’s journey, attracting diverse participants who contribute to the cryptocurrency’s ongoing narrative.

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