60% of Bitcoins haven’t moved for more than a year
With its drastic price swings over the last year, it may come as a surprise to learn that almost 60% of Bitcoins haven’t moved in the last 12 months.
According to findings by Digital Assets Data, a fintech company building cryptocurrency data feeds, as many as 10.7m Bitcoins have stayed put for more than a year. This amounts to 59% of the current supply of BTC (or approximately $84.5bn).
This indicates widespread HODLing of BTC, which could be an extremely bullish sign for the market. Rather than trading or transferring their Bitcoins, the majority of users are holding their digital assets, confident that higher prices are on the horizon.
Founder of blockchain PR agency EAK Digital and organiser of Istanbul Blockchain Week Erhan Korhaliller enthuses: “The fact that 60% of Bitcoin hasn’t moved from wallets in a year is confirmation that Bitcoin is seen as digital gold.”
Not only does this mark a major milestone for Bitcoins being held, but it also represents the highest percentage of BTC lying dormant for so long since the beginning of 2017. Nicholas Pelecanos, advisor to NEM Ventures, comments:
“An increase in the number of dormant BTC wallets simply means less BTC holders are willing to sell their BTC.
“This comes down to two core reasons: 1) The owner of the Bitcoin believes that the price will continue to appreciate and by holding now and selling later they stand a chance to make a profit. 2) The owner of the Bitcoin believes in the core principles that Bitcoin was built around and will hold onto their BTC because of their fundamental beliefs.
“In either scenario, this is bullish for the price of BTC as less supply on the markets will help create higher prices, particularly if public interest in the asset reaches late 2017 levels.”
What else does this mean for the market?
The fact that so many investors are not considering selling BTC right now shows optimism in the asset’s future value. After all, there would be more Bitcoins changing hands if its holders believed that its value would go down.
Korhaliller comments: “This also indicates that many of the weak hands left the market in 2018. This has left a large wall of HODLers that can provide an ever-higher ‘bottom’ Bitcoin price.”
Many BTC holders believe that its price will rise after the upcoming Bitcoin halving in May 2020. This four-yearly event that slashes block rewards for miners in half has historically had a positive impact on BTC price.
The widespread amount of Bitcoins HODLed is in line with the fact that the Bitcoin hash rate is at an all-time high. This shows that miners are also confident in the growth of the network. And it also means that looking back at the price action of 2019, just 40% of all Bitcoins in existence participated in its swings.
Bitcoin has seen several major price swings over the last year. The world’s largest cryptocurrency began 2019 at a price of $3,693 and rose to a high of $13,879 in July, only to sink back as low as $7,280 by the end of December.
Euphoric unsustainable highs of the summer aside, BTC still managed to almost double its value in 2019 – even with 60% of its supply lying dormant.
The Bitcoin community currently seems to be firmly comprised of HODLers rather than traders and speculators.
The fact that investors are holding indicates that they believe in Bitcoin’s long-term growth potential, and that can only be a good thing for the market.
The post 60% of Bitcoins haven’t moved for more than a year appeared first on Coin Rivet.