Unorthodox Bitcoin Trend Could Trigger BTC Demand and Accelerate Price, Crypto Asset Manager Says CoinShares
A leading digital asset manager says that the recent trend of Bitcoin (BTC) investors holding for the long term reveals two key insights.
In its latest Digital Asset Fund Cash Flow Weekly report, CoinShares highlights that in contrast to the previous four-year cycle of Bitcoin, where investors move their BTC to exchanges for a profit. profit, the “2017 category” sold less in 2021 than expected.
“During both the 2013 and 2017 growth periods, large positive net capital inflows have coincided with a decline in the price of Bitcoin (and a decrease in the average age of the coin), suggesting that many long-time Bitcoin holders profitable year during a period of cyclical growth.
Recently, however, we found that while some investors actually decided to move their coins to exchanges and realized the upside at the 2021 market peak, the outflow from exchanges has outstripped the inflows. This shows that a long-term trend is being applied.”
CoinShares also notes that nearly a quarter of the Bitcoin supply remains dormant and the next wave of demand from new investors could push the crypto king to the table. price chart again.
“The lack of inflows into exchanges since 2020 suggests that perhaps the Bitcoin investor class of 2017 were the most consistent savers of any group initiated by open halving events. market wide.
With 24% of the circulating supply (or 4.6 million BTC) currently dormant, coupled with the exchange's downtrend in liquidity, investors can be encouraged that any event Anything that catalyzes significant new investor demand could accelerate the price of Bitcoin. The data analysis firm says that the long-term holding trend suggests that Bitcoin may have matured from a speculative asset to a conservative asset.
“We believe what we are observing is that users are increasingly using Bitcoin as a long-term savings tool and less as an object of short-term speculation.
It also suggests an increased perception of system maturity and a decreased perception of systemic risk among users who seem to be becoming more and more comfortable with using Bitcoin as a store of value. longer term treatment. "
The company adds a warning by pointing out how the financialization of Bitcoin through mainstream investment vehicles means that people can now get exposure to BTC without directly owning it. property ownership.
“However, cautious investors should watch for changes to market structure that lessen the impact of any Bitcoin supply constraints, such as growing evidence of hypothesize or market exposure to synthetic Bitcoin products.”
At the time of writing, Bitcoin is down a fraction and trades for $21,535.
Aug 25, 2022