Addresses Holding 0.1% of Bitcoin Supply Experience Strong Net Inflows in Q3 2023
A recent on-chain report by crypto market intelligence firm IntoTheBlock has revealed that addresses holding at least 0.1% of bitcoin’s supply saw significant net inflows during the third quarter of 2023. Despite BTC’s price plunging to $25,000, these addresses recorded a single-day inflow of $600 million, indicating their bullish sentiment.
Quiet Build-Up of Interest
Following the $600 million inflow, these wallets experienced three more spikes of over $400 million in net inflows, suggesting a quiet build-up of strong interest in BTC. Interestingly, these substantial inflows occurred while centralized exchanges witnessed outflows. IntoTheBlock believes that these wallets belong to organic buyers rather than centralized trading platforms.
SEC Decisions and Holders’ Patience
If the United States Securities and Exchange Commission (SEC) delays its decisions on Spot Bitcoin exchange-traded funds (ETFs), it may test the patience of these holders, according to IntoTheBlock.
Negligible Net Outflows from Centralized Exchanges
Despite the significant net inflows to addresses holding at least 0.1% of BTC supply, there were negligible net outflows of $90 million from centralized exchanges in Q3 2023. This is $1.3 billion less compared to Q2 2023 but $140 million more than Q3 2022.
Bitcoin Fees and Network Demand
In Q3 2023, Bitcoin fees decreased by over 71% compared to Q2 due to the introduction of BRC-20 tokens and the Ordinals protocol for trading meme tokens. However, gas fees on the Bitcoin network have more than doubled since Q3 2022, indicating sustained demand brought by Ordinals.
Rise of Long-Term BTC Holders
On-chain metrics show a growth in the number of long-term BTC holders, comparable to a cycle seen in 2017 that led to significant price appreciation in 2020. Analysts predict that this increase in long-term holders will have significant consequences in 2024, possibly causing a supply shock and impacting bitcoin’s value.
Hot Take: Long-Term Holders Fuel Bull Cycle Potential
The rise of long-term BTC holders signals potential for a future bull cycle. With limited bitcoins remaining to be mined and increasing demand from these holders, analysts believe that bitcoin’s value could soar in the coming years. This trend highlights the importance of tracking on-chain metrics and understanding the behavior of key market participants for crypto investors.
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