Over 60 Percent Of BTC Investors HODL For Long Term Opportunities: Chainalysis Report
Blockchain analytics firm, Chainalysis, released its latest report on the state of Bitcoin’s blockchain showing the majority of the holders are effective HODLers.
According to the report, over 60 percent of Bitcoin in circulation is held as long term investments or a store of value, with only 20% of the total used in trading and transaction activities.
The report also showed that institutional traders dominate the volumes of transfers despite retail traders making up over 90 percent of the total BTC active weekly traders. Finally, only a few of the regulated exchanges (virtual asset service providers, VASP) are responsible for the millions of transactions on the top chain as regulation becomes a focal point of discussion.
‘HODLers Rarely Sell Their Bitcoin’
The cap in total numbers of BTC to be mined is set at 21 million. Of that, 18.4 million coins have already been mined as of June 19, 2020. The research dismisses all BTC that has been held for over five years as lost or unrecoverable. This would account for about 3.7 million BTC or 20.1% of the coins in circulation.
Of the remaining 14.7 million BTC, 78 percent is held by Bitcoin traders as a long term investment with only 3.5 million BTC remaining for everyday use in trading, transactions, lending, etc.
According to Chainalysis’s report, HODLers rarely sell their BTC despite the price appreciation witnessed in the past two years since BTC dropped from all-time highs in 2018. The report reads:
“Roughly 60% of Bitcoin is held by entities — either people or businesses — that have never sold more than 25% of Bitcoin they’ve ever received.”
The remaining Bitcoin (the 3.5 million BTC used in trading) is controlled mainly by large investors and high net worth individuals despite the space being overcrowded by retail traders. The on-chain analysis shows that there are about 340,000 weekly traders globally of the 3.5 million BTC.
Retail traders (value below $10,000) represent the largest class of traders, with nearly 96 percent of the number of trades. However, these traders only contribute to a small fraction of the value of trades made per week, at 15% of the total value.
‘The Biggest Crypto Exchanges win.’
While the more prominent investors control liquidity across the market, the largest holders of the circulating BTC (minus the lost coins) are licensed custodial services, aka VASPs. These include trusted custodians such as Gemini and Coinbase to exchanges and crypto-wallets.
These VASPs hold about 80% of the total circulating coins (minus lost) with the top four exchanges; Binance, Coinbase, Huobi, and Bitfinex, holding nearly 40% of this amount.