More than 11 million in BTC is held as a long-term investment, as the latest cryptocurrencies news show. This value diminishes the tradeable supply of Bitcoin to only 20% of the total BTC in circulation.
The reports were issued by Chainalysis and as the firm noted, the vast majority of Bitcoin (BTC) is held as a long-term investment, while 60% of the total cryptocurrency in circulation is held by licensed custodians. Below is a good visual representation of the cryptocurrency’s division.
What we can also see in the Bitcoin news, coupled with the fact that 11 million in BTC is held by long-term investors, is that the breakdown of the BTC supply makes it very similar to gold and supports the asset’s status as digital gold.
Chainalysis clarified that it is the 3.5 million BTC that is actively traded which supports the price of the coin. As they said:
“But this digital gold is supported by an active trading market for those who prefer to buy and sell frequently. The 3.5 million Bitcoin used for trading supplies the market, and, in interaction with the level of demand, determines the price.”
Chainalysis defined the long-term investors (with more than 11 million BTC) as those who have never sold more than 25% of their holdings. The firm noted that such users have been holding their assets for many years.
Further analyzing the trading segment of the Bitcoin supply, Chainalysis also noted that although retail traders are responsible for 96% of the total transactions, professionals are who moves the bulk of the volume.
“Retail traders, whom we categorize as those who deposit less than $10,000 USD worth of Bitcoin on exchanges at a time, appear to be the large majority, accounting for 96% of all transfers sent to exchanges on an average weekly basis. Professional traders, however, control the liquidity of the market, accounting for 85% of all the USD value of Bitcoin value sent to exchanges,” is another excerpt found in the report.
The company also said that the maximum number of weekly BTC traders in 2020 was 340,000. Chainalysis also covered the Coinbase news, stating that the exchange alone holds close to 1 million in Bitcoin (BTC).
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