Surprising! 729,400 Bitcoin Wallets Vanished 😮 Any Explanations?

On-chain data suggests around 729,400 Bitcoin wallets cleared themselves out in the last month. Here’s what could be behind this trend.

In a recent post on X, the on-chain analytics firm Santiment discussed the trend in the “Total Amount of Holders” for Bitcoin and how it differs from Ethereum and Tether.

The “Total Amount of Holders” Indicator

The “Total Amount of Holders” refers to the total number of addresses carrying a non-zero balance on the blockchain. This metric can indicate new addresses appearing or old investors returning to cryptocurrency.

When this metric rises, it suggests more adoption is taking place, which is a positive sign for the cryptocurrency in the long-term. On the other hand, a decrease in this indicator indicates that some investors are selling their entire wallet balance, signaling an exit from the asset.

The Trend in Total Amount of Holders

A chart comparing the trend in Total Amount of Holders for Bitcoin, Ethereum, and Tether over the past year shows that while Ethereum and Tether have seen an increase in holders, Bitcoin has experienced a decline since January 20th.

This discrepancy may be due to a specific event related to Bitcoin. On January 10th, the US Securities and Exchange Commission approved spot exchange-traded funds (ETFs) for Bitcoin. ETFs provide indirect exposure to underlying assets and trade on traditional markets.

It’s possible that after ETFs were approved, some Bitcoin holders shifted their exposure to these investment vehicles rather than holding Bitcoin directly. As a result, the Total Amount of Holders for Bitcoin decreased while Ethereum and Tether continued to attract more adoption.

Impact on BTC Price

Bitcoin’s price has been consolidating sideways in the past week, indicating a period of stagnation for the asset.

Bitcoin Price Chart

Hot Take: Bitcoin Wallets Clearing Out – Is ETF Adoption to Blame?

The recent decrease in the Total Amount of Holders for Bitcoin could be attributed to the approval of ETFs for the cryptocurrency. This option provides an alternative for investors who are unfamiliar with wallets and exchanges, leading them to choose ETFs instead.

While this trend may have impacted Bitcoin, Ethereum and Tether have seen continued growth in their holder numbers. As more assets gain ETF options in the future, a drop in active wallets on their respective networks can be expected.