New research from Chainalysis suggests that the majority of Bitcoin’s circulating offer is being maintained over the long term by investors
A fifth of Bitcoin’s mined supply is actively traded, while the rest of its circulating supply is maintained over the long term by investors, according to the latest report by blockchain analyst firm Chainalysis. The company’s data states that only 19% of all BTC extracted to date is being handled by traders.
About 20% more, according to the company, were lost to dead-end addresses and forgotten wallets (not to mention the six or seven-digit BTC stock owned by Bitcoin pseudonym creator Satoshi Nakamoto).
But, as with the rest of the circulating offer, around 60% was maintained over the long term by the various participants in the Bitcoin market.
In addition, these “entities – people or companies, have never sold more than 25% of the Bitcoin they have received and often keep that Bitcoin for many years,” the report said.
Most of Bitcoin is kept as a long-term investment. Source: Chainalysis
For the 3.5 million Bitcoins that are actively traded, 96% of that volume comes from so-called retail traders. (Typically, a “retail” tradert refers to any market participant not linked to a financial institution, but in the Chainalysis report, this is defined as any entity that moves $ 10,000 or less at a time.)
As a result, most entries (over 625k) to BTC exchanges each week since 2018 occur in increments of $ 10-1,000, while other 125k transfers occur in $ 1,000 to $ 10,000.
Chainalysis compared this demographic group to professionals, a distinction that would include institutional actors, but would not necessarily exclude retail whales that trade independently of an institution.
Of the 340,000 weekly Chainalysis data of the active Bitcoin traders identified, 4% of the professional traders / entities in that group (approximately 14,200) are responsible for 85% “of the entire dollar amount of Bitcoin sent to the stock exchanges”.
“Because of this, professional traders are the most significant contributors to major market movements, such as those observed during Bitcoin’s dramatic price decline in March, when the Covid-19 crisis intensified in North America,” he said. the analysis company. “However, professional traders are few in number, moving all of that in just 39,000 transfers per week, on average, in 2020.”