A recent study shows that over 60% of Bitcoin supply has been illiquid for the past 1 year. This shows that despite the bear market, investors are holding onto their coins. Bitcoin has always given a positive return to investors who have held their coins for more than 4 years through the bear markets. So, it isn’t surprising that 65% of the total BTC supply hasn’t moved as the next halving nears.
Bitcoin network activity
If we dive deeper into the data from Glassnode on the Bitcoin network, the trend will appear even more bullish. About 12.35 million bitcoins (65% of total supply) have been illiquid for a year, and out of these, 8.55 million (45%) Bitcoin have been inactive for 2 years. In fact, 38% of the total supply, or 7.22 million Bitcoins, haven’t moved in 3 years.
So, more than half of the illiquid coins for a year are inactive for 3 years. Now, we must consider that these coins will also include lost keys, forgotten coins, and more. However, it won’t be a lot. The majority of these coins are expected to be long-term holders who entered the market during the 2018 bull run or 2019-20 bear market.
There is also data showing coins that haven’t moved in 5 years or more, and it accounts for nearly 1/4th of BTC’s total supply at 4.37 million.
Why is this data so important?
Investors holding on to their coins for so long shows belief that BTC will soar higher. It also invalidates the theory that Bitcoin is a bubble. How so? It’s quite simple, actually. Let’s take the example of the 2008 housing bubble in the US. During the time, real estate was giving such good returns that investors were flipping their properties quite fast, and no one was really looking at them as a long-term investment. Any asset is in a bubble if we see a trend that long-term investors are becoming short-term.
In the case of Bitcoin, that is not the case, and the general trend of more long-term investors is rising. Another positive thing is that a lower supply and higher demand would make the next bull run quite a blast.
What are your thoughts as the study shows that over 60% of Bitcoin supply has been illiquid in the past year? And have you also been holding Bitcoins? Let us know in the comments below. And, if you found our content informative, do share it with your friends.
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