Untouched Bitcoin Reaches 5-yrs High, BTC Increasingly Becoming a “Store of Value” as Opposed to a Medium of Exchange
- The percent of overall BTC supply untouched for at least five years reached a five year high of 21.6% at over 3.8 million BTC
- The untouched supply tends to mirror the price of the asset
- BitMEX Bitcoin holdings continue to drop following the CFTC probe
- Macro factors to provide long term support to Bitcoin price
The amount of Bitcoin untouched for about 5 years is at an all-time high (ATH), reported Coin Metrics in its latest State of the Network report.
In the past five years, 3,847,859 BTC registered on July 19th, had not moved since at least five years prior.
The total untouched supply is calculated by subtracting total active supply from the total current supply. Though the size of the BTC supply has been growing consistently, the percent of overall BTC supply has been untouched for at least five years reaching a five year high of 21.6%.
“This potentially signals that BTC is increasingly becoming a store of value, as opposed to a medium of exchange.”
However, Adamant Capital’s Tuur Deemester believe it could be rather a matter of lost coins.
“5 years without updating your cold storage method is a long time in Bitcoin. Imo most of these coins are likely lost.”
For the last three years, Bitcoin's inflation has arguably been zero. https://t.co/53EwNfjImM
— Tuur Demeester (@TuurDemeester) July 23, 2019
The untouched supply mirrors price movements and tends to peak towards the bottom of a price trough and vice versa.
At the end of November 2018, the untouched supply of Ethereum reached all-time highs while its 180-day untouched supply is now approaching the ATH. 2 year untouched supply, meanwhile is about 5 million below its peak.
BitMEX Bitcoin Holdings Continue to Drop
The number of Bitcoin held by derivatives exchanges BitMEX continues to drop following the CFTC probe into the presence of US traders on the platform.
BitMEX’s BTC supply dropped to 174.9k as of July 21st, from the peak of 246k on 3/4/19.
Since the news broke out, funds have been increasingly flowing out of BitMEX. Over three days from July 19th to 21st, a total of $135,361,144.30 of BTC was withdrawn while $38,978,107.34 flowed in.
Macro Factors to Provide Long Term Support to Bitcoin price
Meanwhile, over the past month, Bitcoin experienced two local peaks in price, now experiencing a correction.
Over the past two months, almost all assets have registered a steep correction in price with some major assets down over 40%, during this period Bitcoin remained steady recording only a 2% decline.
Coin Metrics further states regulatory, geopolitical and macroeconomic factors as the driving force behind Bitcoin’s performance.
Though empirical evidence around Bitcoin’s reaction to changes in future monetary policy, and expectations in inflation and growth are mixed, it says the factor should provider
“further long-term support to Bitcoin prices.”