Report: Bitcoin sees a surge in short-term investors

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As a researcher with several years of experience in the crypto market, I find the recent shift in Bitcoin ownership intriguing. The surge in short-term investments driven by spot Bitcoin ETFs is noteworthy, indicating a strong level of investment activity at the current price point. However, this increase also brings vulnerability and potential risks due to price fluctuations.

According to a recent analysis from Bitfinex Alpha, there’s been a noticeable change in Bitcoin ownership. The number of short-term investors has significantly increased due to the growing interest in spot Bitcoin Exchange Traded Funds (ETFs). Long-term holders, on the other hand, continue to exhibit faith in the market.

In recent times, there has been a significant shift in Bitcoin (BTC) ownership among crypto market participants, particularly among those who buy and sell cryptocurrencies frequently.

Bitcoin investors with a short-term horizon, usually holding the cryptocurrency for under 155 days, have shown heightened engagement recently. Their collective ownership of Bitcoin surged from approximately 2.2 million coins in January to over 3.4 million coins by mid-April – representing roughly a 55% expansion.

This rise is mainly linked to the increasing impact of spot Bitcoin ETFs.

Short-term vs. long-term holders

As a crypto investor, I’ve noticed an uptick in short-term Bitcoin (BTC) holders based on recent reports. This surge suggests significant investment in BTC, fueled by the debut and rising adoption of spot Bitcoin Exchange Traded Funds (ETFs). The fact that these brief asset tenures are clustered around the current market price indicates robust buying activity at this specific price point. However, the presence of a large number of short-term holders can increase volatility and potential risks, possibly resulting in price swings or even drops.

Newcomers to the Bitcoin market continuously increase the number of short-term holders, causing this figure to climb steadily. Yet, the price remains unchanged because older coins are being circulated among the market participants. The market is still adjusting, and the $60,000 to $70,000 range may establish a new floor for Bitcoin, similar to how $10,000 served as a foundation in 2020.

As a crypto investor, I’ve noticed that there seems to be leftover supply from the previous market cycle still affecting the current prices. With the surge of new investors jumping in and buying Bitcoin, short-term holders have been cashing in on the steady price rise. However, the real game-changer hasn’t fully materialized yet due to older coins being gradually distributed back into the market. We’re not quite there yet, but the potential for significant gains remains.

— Thomas | heyapollo.com (@thomas_fahrer) June 12, 2024

Approximately 3.3 million Bitcoins are presently held by short-term investors. This figure represents a small decline from the record high reached around mid-April. The reduction can be attributed to the market correction in March following Bitcoin’s attainment of its all-time price peak.

Bullish sentiment for long-term BTC holders

However, in contrast, long-term Bitcoín investors have been displaying strong faith in the market since Bitcoin reached a record peak of $73,666 in March. Despite this milestone, numerous long-term investors chose to sell considerable quantities of their Bitcoins.

Based on latest figures, it appears that the practice of disposing Bitcoin in the market has diminished, while long-term investors have taken over to amass more Bitcoin. The quantity of Bitcoin owned by investors for over twelve months has remained relatively stable, signaling a preference towards keeping these assets rather than frequently buying and selling them.

As an analyst, I have observed that my STH position in Bitcoin (BTC) has reached the breakeven point following the recent dip. This suggests a potential reaction zone and the possibility of a short-term bottom. However, it’s important to note that the intensity of this reaction is uncertain. For those with a long-term perspective and holding strategy for Bitcoin, maintaining their positions could be an optimal move. By analyzing both Bitcoin and my STH position together, I believe there is a strong likelihood that a short-term bottom may form within this week.— Kyledoops (@kyledoops) June 11, 2024

Approximately 0.03% of the cryptocurrency hoard kept by long-term investors consists of coins purchased at costs surpassing the present market price. During the early phases of a bull market, it’s usual for such investors to maintain their lucrative investments.

Bitcoin’s large-scale investors, referred to as “whales,” have been amassing Bitcoin at a rate similar to the frenzy before the 2020 bull market, resulting in an all-time record increase in their Bitcoin holdings.

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2024-06-13 00:30