More than 11M Bitcoin Held For Future Investments
11.4M Bitcoin Held By Investors
More than 11 million Bitcoin is currently held by long term investors. This currently diminishes the current tradeable supply to just under 20% of the entire Bitcoin supply. According to Chainalysis, a bulk of Bitcoin is held by long term investors, with 60% held by licensed custodians.
The New Gold
In a breakdown of Bitcoin’s supply, Chainalysis compared it to gold. They even classified Bitcoin as the new gold. Part of the explanation offered is that the 3.5 million Bitcoin currently traded is what is keeping the asset strong.
“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, determine the price.”
According to Chainalysis, long term investors are people who have never sold more than 25% of their holdings. Such users end up holding their assets for several years.
More Than 300,000 Weekly Traders
Analysis of the trading segment of Bitcoin Supply shows that retail traders handle 96% of transactions, while professionals move the highest volume.
“Retail traders, whom we categorize as those who deposit less than USD 10,000 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.”
In 2020, the maximum number of weekly traders was around 340,000.
Close to 60% of the Bitcoin supply is held by licensed custodians. These custodians include several exchanges. For example, Coinbase holds nearly 1 million Bitcoin.
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