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Over 50% of Bitcoin’s Circulating Supply Hasn’t Moved in the Last Year
Diamond hands are tightly holding more than half of Bitcoin's circulating supply—and will not let go.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
To investors who beheld the 2019 Bitcoin bull run, even the thought of selling their digital gold coins at around $30k is quite abhorrent. New data from Glassnode reveals that in spite of Bitcoin losing nearly half of its value from this year’s ATH, its supply is becoming less and less accessible.
Bitcoin’s Active Supply is Curtailing
Today, June 2, the prominent blockchain data provider Glassnode alerted that Bitcoin’s last-active-two-years-ago supply has reached a 5-month low of 44.5%. As per data, the last time these measures were reached was when Bitcoin was priced at around $22k.
To add to the mix, 54% of Bitcoin’s circulating supply was last active more than a year ago, Glassnode metrics reveal. The data designate that whales do not find the current Bitcoin price range very attractive, and they are mass-accumulating for the long-term.
This behavior comes as no surprise since numerous price indicators including Bitcoin sentiment the Crypto Fear & Greed Index shows that a $37,000 price tag for Bitcoin is not commensurate with its value. As of now, the Fear & Greed Index for Bitcoin shows extreme fear, which is an indication that the asset is being traded below its intrinsic value.
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Institutions Did Not Sell During May Sell-Off
Data from blockchain analyzer Chainanalysis reveals that the Bitcoin May 2021 sell-off was mostly from addresses held on exchanges. The investors who use exchanges to store their crypto are either day-traders or retail crypto investors. Thus, it can be argued that institutions and whales did not sell during May.
Furthermore, Chainanalysis statistics reveal that post-2017 whales are actually buying the dip. The report by Chainanalysis asserts that “Bitcoin investor whales increased their holdings by 34k bitcoin in the last two days as price fell”. To further approve this argument, Microstrategy CEO Michael Saylor stated that he not only did not sell any Bitcoin, but instead acquired more.
In a report on the May 2021 sell-off, Glassnode wrote:
“The magnitude of accumulation over the past two years is remarkable, however the scale of the sell-pressure in May is also notable. Investors were clearly spooked during this recent sell-off.”
Bitcoin Noobs Panic Sold
Another remarkable group that sold a lot of their Bitcoin holdings was the newcomers to the space. Observing Bitcoin lose more than half of its value over a couple of days is nerve-racking to everyone, but more to those who have not seen similar activity before.
According to a report by Glassnode, newer Bitcoin entrants, those who purchased Bitcoin at $30k+, have panic sold and realized significant losses on their coins.
Miners, though, have been reluctant to sell Bitcoin, especially in the current price range. According to statistics from Glassnode, the Bitcoin outpouring from miner addresses is currently at a seven-month low. This, again, brings us to the conclusion that the only sellers during May were newcomers and retail investors.
Do you think the shortage of Bitcoin’s active supply plays a role in pushing the prices to new ATHs? Let us know in the comments part.
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