Bitcoin investors hold tight in uncertain times, on-chain data shows

Bitcoin held in wallets that have little to no transaction history suggests more holders are opting to guard their coins rather than spend them in anticipation of future price rises

article-image

ioda/Shutterstock, modified by Blockworks

share

Despite fresh waves of regulatory litigation and muted market dynamics, on-chain data suggest larger crypto investors are clinging on throughout a period of uncertainty.

On Tuesday, the number of unique addresses holding at least one bitcoin breached new highs, above one million, as the market continues to digest Blackrock’s spot ETF filing late last week.

Addresses cradling a larger share — above 10 BTC — have also breached heights not seen since September 2019, market data shows

Also this week, bitcoin’s dormant supply hit a new all-time high of 15.2 million BTC, while exchange balances plunged to their lowest since January 2018, Glassnode data shows.

Bitcoin held in wallets that have little to no transaction history suggests more holders are opting to guard their coins rather than spend them in anticipation of future price rises.

Roughly 146,000 BTC per month is making its way into illiquid wallets away from centralized exchanges. That may be offering up a narrative for a “gradual and steady” accumulation phase for specific cohorts over the next six months, Glassnode said.

It could also lead to a period of boredom over the next eight to 18 months, Glassnode added, pointing to previous cycles throughout bitcoin’s 14-year history.

Still, Blackrock’s decision to push through its iShares Bitcoin Trust with the SEC comes at a time of doubt among sophisticated entities seeking to turn a profit — including market makers, said Auros co-founder Ben Roth.

“Markets have become noticeably quieter in recent months with volumes dropping to three-year lows and volatility at levels not seen since 2019,” Roth told Blockworks. 

This can be partly attributed to an extended downtrend in the market, where crypto “tourists” eventually concede defeat and cash out, the co-founder added.

It’s also a consequence of regulatory scrutiny across a number of jurisdictions — including in the US — which has led to large trading firms withdrawing from select market segments.

“Given this inherent risk, it is not surprising if spreads widen further and overall liquidity diminishes, thereby further widening spreads and so on,” Roth said.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million