Chainalysis Report Suggests Bitcoin Whales Hold Billions of Cryptocurrencies
Chainalysis, a blockchain-based firm that works towards acknowledging connections between entities on the Bitcoin blockchain, has recently concluded that Bitcoin whales are rightful owners of approximately a third of the total cryptos available or USD$37.5 billion worth.
The report detailed the transfer of cryptos, speed, the reasons as to why and how BTC reached its ath (all time high) and why the prices have plummeted in 2018.
It is believed that between the periods December 2017 and April 2018, investors sold close to USD$30 billion worth to possible investors. According to Chainalysis’ viewpoint, which defines “speculators” as “clusters of accounts” owned by the same individual or business is the sole reason as to how BTC supply soared by approximately 57% near the year-end of 2017.
A further point was made, which stated that a price recovery will only occur given that funds are lifted from exchanges and are not “part of the books”. Another way to help BTC regain its strength, is by potentially introducing the crypto market to new investors – this will more likely increase demand as well.
A year since April 2017, the Chainalysis report reveals that BTC held for investment dropped to 50% from a significant high of 72%. This goes to show that many long-term investors took advantage of the all-time-highs in December 2017 to pocket as much profits as possible.
Another facet of BTC that was analyzed is its supposed velocity, which is equivalent to the number of times Bitcoins were expended. Based on the statistics provided, the average velocity within a time frame of 2016-17 was sitting at 26.4, which fell to an unbelievable 8.5 within the first four months of 2018. Unfortunately, the downward trend continued, as it currently sits at 4.4.
While the sudden drop may come of surprise, there are many reasons tied to it, namely, a drop in transaction volumes, which was done as an effort on speculators’ part to increase its prices. If this trend continues, those who have recently joined the crypto market, will be forced to exit the market with loses as opposed to gains.