On-chain data shows long-term holders of Bitcoin now hold 78% of the total circulating supply, the highest value ever seen.
Long-Term Bitcoin Holders Sit on 78% Of Total Supply
As pointed out by the analyst Twitter, the difference between long-term holders and short-term holders is now the largest. Long-term holders (LTH) and short-term holders (STH) are the two main groups of holders into which the entire Bitcoin market can be divided.
STH includes all investors who bought the coin in the last six months, while LTH includes those who acquired BTC earlier than the threshold amount.
Statistically, the longer an investor holds a coin, the less likely it is to sell at any given point. Thus, LTH generally tends to keep coins inactive for a longer period of time than STH. For this reason, LTH is also often referred to as the “diamond hand” of the Bitcoin market.
Now, the relevant indicator here is “young vs old supply percent,” which measures the percentage of the total BTC supply that is currently held by STH (“young” supply) and what is held by LTH (“old” supply).
Here is a chart showing the trends in this Bitcoin metric throughout the cryptocurrency’s history:
The two supplies seem to have diverged away from each other in recent months | Source: Glassnode on Twitter
As shown in the chart above, the percentage of total Bitcoin supply held by LTH has only continued to rise for several years now, indicating that there is a shift towards a HODLing mentality among investors in the market.
When this happens, the percentage contributed by the supply of STH has naturally shrunk, because the value is simply calculated by subtracting the percent supply of LTH from 100.
One recent brief decline was observed after the collapse of the crypto exchange FTX, which showed that the crash could shake the hands of the strongest in the market. However, it didn’t take long until the owners refocused and the supply started to increase again.
After the latest accumulation by the cohort, the percentage of the supply they hold has reached 78%. STH makes up the remaining 22% of the supply.
From the chart, it is clear that the difference between the two Bitcoin supplies is at its greatest level today. This means that selling pressure from most supplies should be at least for now, as it may remain inactive for a long time with LTH.
Such a supply shock in the market could be bullish for the price of Bitcoin in the long run.
BTC price
At the time of writing, Bitcoin is trading around $23,500, up 2% over the past week.
Looks like BTC has continued to consolidate in the last few days | Source: BTCUSD on TradingView
Featured images from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com