According to data from blockchain analytics firm Glassnode, long-term Bitcoin holders now control a record 14.599 million BTC. Over the past week, the total balance held by these wallets increased by 43,949 Bitcoin, equivalent to approximately $1.274 billion at current prices.
Addresses classified as long-term holders are those that have held their coins for at least 155 days. Previous research from Glassnode indicates that such addresses are statistically unlikely to spend their coins, a behavior commonly referred to in Bitcoin terminology as "HODLing."
The amount held by long-term investors now represents 75% of Bitcoin's circulating supply, signaling strong investor confidence and a preference for holding assets over the long term. In February, long-term holders controlled as much as 78% of the network's circulating supply. This sustained pattern of holding may reflect growing belief in Bitcoin’s potential as a store of value.
Bitcoin's Realized Volatility Hits Historic Lows
An anonymous on-chain analyst at Glassnode, known as Checkmate, pointed out that Bitcoin’s realized volatility has also dropped to historic lows. "Across the 1-month to 1-year time frames, this is the quietest period we’ve witnessed since March 2020," Checkmate noted. "Historically, such low volatility aligns with the post-bear market recovery phase, often referred to as the reaccumulation stage."
Realized volatility, sometimes called historical volatility, measures the degree of price variation an asset experiences over a specific period. It is typically calculated based on changes from one closing price to the next.
According to CoinGecko, Bitcoin is currently trading at $29,010, down 0.1% over the past 24 hours. Over the last month, the world’s leading cryptocurrency has declined by 4.3%, after briefly surpassing $31,500 in mid-July amid a wave of new Bitcoin ETF applications.
Despite recent fluctuations, Bitcoin has gained 75% since the beginning of the year, significantly outperforming major traditional indices such as the Nasdaq Composite (+33% YTD), the S&P 500 (+17% YTD), and the Dow Jones Industrial Average (+5.82% YTD).
Understanding Long-Term Holder Behavior
Long-term Bitcoin holders are often seen as the bedrock of the cryptocurrency's market stability. Their reluctance to sell, even during periods of high volatility or price peaks, suggests a deep conviction in Bitcoin's long-term value proposition. This behavior can reduce market liquidity but also diminish panic selling during downturns.
Many analysts interpret high levels of long-term holding as a bullish indicator. It implies that a substantial portion of the supply is effectively locked away, which can lead to upward price pressure if demand increases. This is particularly relevant in the context of Bitcoin’s fixed supply cap of 21 million coins.
Market Context and ETF Influence
The surge in Bitcoin ETF applications has introduced a new dynamic to the market. Institutional interest, exemplified by these applications, has contributed to both price advances and increased mainstream acceptance. However, it has also introduced new sources of volatility, as regulatory developments and institutional investment flows are closely watched by the market.
Even with recent price consolidations, the overarching trend remains positive for Bitcoin when viewed from a year-to-date perspective. Its performance relative to traditional assets highlights its growing appeal as both a speculative asset and a potential hedge against inflation or economic uncertainty.
Why Volatility Matters for Investors
Volatility is a double-edged sword: it presents opportunities for traders but can be a source of risk for long-term investors. Periods of low volatility, such as the current one, often indicate market consolidation and can precede significant price movements. For those considering entering the market, such phases may offer a relatively stable environment to explore more strategies.
Understanding volatility patterns helps investors manage risk and set realistic expectations. While Bitcoin is known for its price swings, extended calm periods remind us that the market cycles through phases of activity and rest.
Frequently Asked Questions
What defines a long-term Bitcoin holder?
A long-term Bitcoin holder is typically defined as an address that has held its coins for at least 155 days. Data suggests that after this period, the likelihood of spending those coins decreases significantly.
Why is the amount held by long-term investors important?
When long-term holders accumulate and retain Bitcoin, it reduces the available supply on the market. This can create upward price pressure during periods of high demand and contributes to market stability.
What does low realized volatility indicate?
Low realized volatility suggests that the asset's price has been relatively stable over the measured period. For Bitcoin, this often occurs after major price swings and can signal a phase of accumulation before the next significant trend.
How has Bitcoin performed compared to traditional stocks this year?
Bitcoin has significantly outperformed major stock indices in 2023, with a 75% year-to-date gain compared to the Nasdaq Composite's 33%, the S&P 500's 17%, and the Dow Jones' 5.82% increase.
What impact do Bitcoin ETFs have on the market?
Bitcoin ETF applications and approvals can increase institutional participation, boost liquidity, and enhance legitimacy. However, they can also introduce new volatility based on regulatory news and investment inflows.
Is now a good time to invest in Bitcoin?
Market conditions are always changing. While long-term holder accumulation and low volatility may suggest stability, potential investors should conduct their own research and view real-time tools to make informed decisions based on current data.