A Majority of Bitcoin Holders Are Seeing Positive Returns
According to the latest Bitfinex Alpha report, more than 83% of BTC supply is currently held at a profit, the highest percentage since November 2021. This indicates that a majority of Bitcoin holders are currently experiencing positive returns on their investments.
Bitcoin Holders Maintain Their Positions
The recent surge in Bitcoin’s price has resulted in a significant portion of the circulating supply being in profit. However, the unrealized profit of these holders is not particularly large. Glassnode data reveals that around 83.7% of the total circulating supply, equivalent to 16.366 million BTC, is currently in profit. This percentage is higher than the all-time average and suggests that the crypto market is in a relatively strong position.
Despite this, on-chain metrics show a decline in the activity of long-term holders (LTHs), indicating that they prefer to hold onto their assets instead of selling them.
Inactive Bitcoin Supply Reaches New Highs
A significant portion of Bitcoin’s circulating supply has remained dormant for a year as long-term holders maintain their positions and short-term holder supply decreases. Approximately 70.35% of BTC supply, which is equivalent to 13.65 million BTC, has not been transacted or moved in the past year. This suggests a stronger base of long-term holders and a decrease in speculative trading.
The current low velocity of Bitcoin, which measures how frequently it is traded or used for transactions, aligns with this trend. The velocity metric is currently at a historically low level, indicating reduced trading activity compared to previous bear market cycles.
Hot Take: Anticipating Changes as Bitcoin’s Price Rises
As Bitcoin’s price continues to climb, it is expected that the velocity will begin to rise, and the amount of dormant Bitcoin will decrease. This shift will occur as long-term holders start selling their holdings and converting their unrealized gains into realized profits. It remains to be seen how these changes will impact the market dynamics and investor behavior in the future.
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