Glassnode’s recent report shows that the Bitcoin bull market (BTC) has seen a large transfer of wealth, from existing investors to those who are new. Reportages.
Redistribution from long-term holders to novices is one of the hallmarks of mature Bitcoin markets. Long-term Bitcoin holders are making record profits. Their daily peak was $2.1 billion. New investors have come in and absorbed this surplus.
The report states that this is an indication of how the Bitcoin ecosystem has grown in depth, with a growing number of institutions participating and a strong interest from retail.
In 2024, long-term Bitcoin holders — especially those holding coins for six to 12 months — emerged as key contributors to sell-side pressure. The coins were primarily acquired in early 2018, and accounted for 38.5%, or $27.3 billion, of the realized profits.
Coins that have been held over three years are still relatively unsold, indicating that a higher price level may be required to encourage their sale. Coins held over three years are largely unchanged, indicating that higher thresholds of price will be needed to encourage their owners to sell.
This is an inherent cycle in Bitcoin markets, according to the report. The report noted that as the price rises, long-term owners distribute wealth and allow new investors absorb supply.
Profit-making meets demand
In spite of the massive profit-taking on behalf of long-term investors, new investors continue to provide liquidity, which is what keeps Bitcoin moving upwards. Short-term investors (STHs), as measured by metrics, are able to weather market fluctuations without cascading sales.
While STH coins suffered unrealized losses in August 2023 or September 2024 during the market corrections, this loss did not result in widespread panic buying. In fact, a robust demand for new coins stabilized the markets and avoided significant declines.
The current Bitcoin market has seen a reduction in volatility as compared with previous bull markets. In August, the biggest drawdown occurred at 32%. This was significantly lower than previous corrections.
Analysts attribute stability to an increase in institutional participation, supported by the introduction and acceptance of Bitcoin ETFs (exchange-traded funds) on a spot basis.
This institutional demand, in addition to buying pressures from retail newcomers, has significantly supported the market. It ensured liquidity during price declines and helped support the resilience of the prices.
Additional Benefits
Bitcoin’s value has risen by over 150% since 2024. The price reached a record-high of $108,600 in the year and is now trading around $100,000, after minor correction. This cycle’s growth of 638% is in line with previous halvings such as those from 2015-2018 and 2018-2021.
The market is not overheated despite these gains. Glassnode’s AVIV (unrealized profit) ratio indicates the market still hasn’t reached the euphoria that is typical for bull market peaks. It indicates the potential for further gains before profit taking overwhelms demand.
The interplay between Bitcoin’s long-term investors and the new demand is critical as Bitcoin’s dynamic price changes. Although sell-side pressure will increase as the price climbs, new investor activity is resilient and suggests that the market can sustain its momentum.
Bitcoin Market Data
Press release On December 19, 2024 at 12:13 AM UTCBitcoin has the largest market cap in terms of price and is currently ranked number one. You can find out more about it by clicking here. 5.44% Over the past 24 hour. Bitcoin’s market capitalization is One trillion dollars The 24-hour volume trading is $94.5 billion. Learn more about Bitcoin ›
Bitcoin
On December 19, 2024 at 12:13 AM UTC
$100,473.25
-5.44% Crypto Market Overview
Press release On December 19, 2024 at 12:13 AM UTCThe total market value of crypto is at 3.49 trillion dollars With a volume of 24 hours. 247.36 billion. Bitcoin is the dominant currency at this time. 57.00%. Learn more about the crypto market ›
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