BTC supply percentage in retail hands reaches 17%.
Retail investors hold more Bitcoin this year despite the collapse of several high-profile companies. Furthermore, long-term holders also hold the highest portion of BTC supply ever.
Not everything is doom and gloom in the world of cryptocurrencies. Bitcoin’s on-chain metrics remain positive despite a 75% decline in prices.
According to an on-chain analysis by Glassnode, the supply of BTC held by retail traders has reached a record 17%. The company defines retail investors as those with wallets that contain less than 10 coins.
Reflexivity Research co-founder Will Clemente tweeted that “The percentage of Bitcoin supply held by retail has soared to 17% this year. Not perfect yet, but solid for a 12-year-old asset and definitely trending in the right direction. Bitcoin’s supply disperses over time, while Fiat’s holder base concentrates to whales over time.”
Bitcoin Holders Remain Determined
Retail investors are often the first to panic during a market downturn or a period of FUD (Fear, Uncertainty, and Doubt) in the media. That certainly happened in 2022, as it did in 2018 following the ICO (initial coin offering) crackdown.
Also, retail investors are often late to the party, piling in only after the bull market has fully established itself. Long-term and institutional investors are a bit smarter to accumulate at the bottom of the cycle, which is now.
Long-term Bitcoin holders currently hold 85% of the circulating supply, according to a recent report from Coinbase Institutional.
Glassnode confirmed the findings by stating that the ‘hodler’ supply hit a record 13.9 million BTC this month. The amount of long-term Bitcoin holdings is reportedly equivalent to around 72.3% of the circulating supply. However, it determines as long-term holders those who hold the asset for more than 180 days. Both metrics suggest that there is still a lot of conviction and confidence in Bitcoin despite the market turmoil this year.
Coinbase also suggested that “high-quality” assets will be preferred over altcoins in 2023. Institutional investors will mainly favor BTC and ETH for the next few months until the liquidity crisis ends.
Crypto Market Outlook
Crypto markets remain sideways with minor gains today. Total market capitalization is around $844 billion, which isn’t too far off last month’s cycle low.
Analysts, in general, hold the view that low volatility and sideways trading will continue well into 2023.
“We assign a low probability that cryptocurrency returns will decouple from traditional risk assets in the first few months of 2023,” Coinbase researchers noted.
By Audy Castaneda
