On-chain analytics company Glassnode has taken down a group of Bitcoins that have been collected and distributed over the past year.
Bitcoin Whale Distributes Coins Equivalent to 60% of Mining Supply Over Past 12 Months
As data from Glassnode, whales, miners, and outgoing exchanges were the main sources of distribution in the past year. The relevant indicator here is the “annual absorption rate,” which measures the change in the Bitcoin balance each year of different cohorts in the market and compares it to the number of coins issued during the period.
“Coins issued” refers to the total amount of BTC miners receive as block rewards for mining blocks. These newly produced coins must go somewhere, and that annual absorption rate metric tries to paint a picture of the supply flow of BTC.
The groups Glassnode considers are shrimp (investors holding less than 1 BTC), crabs (between 1 and 10 BTC), whales (more than 1,000 BTC), and miners. In addition, the company also includes data for “exchange outflow,” which measures the total amount of coins withdrawn from the wallets of all centralized exchanges.
Now, first, here is a graph showing which of these groups of investors absorbed the positive amount of the annual coin issuance:
The value of the metrics seem to have been quite high in recent weeks | Source: Glassnode on Twitter
As shown in the graph above, the annual Bitcoin absorption rate of shrimp is 107% now, which means that this group of investors added 107% of the total money issued in the network to their holdings during the last year.
The indicator value is even higher for crab at around 120%. From the chart, it is clear that the metric has experienced a rapid increase in the past few months, indicating that much of the accumulation occurred after the collapse of FTX.
Since the amount added by these groups is higher than what the network issued last year, it seems reasonable to assume that some groups need to distribute or sell coins to make up the difference. The chart below shows which groups have shown distribution behavior over the past year.
Looks like these metrics have been deeply negative recently | Source: Glassnode on Twitter
It seems that the annual absorption rate of the whale is 60% underwater, which shows that this humongous holder has released coins equal to 60% of the source issued from the wallet last year.
The exchange also distributed a large amount of Bitcoin as the metric value was negative 178% for exchange outflows. The platform experienced a huge withdrawal this time in part due to the collapse of FTX, which made BTC holders more aware of the risks of keeping their coins in centralized wallets. This resulted in mass migration of BTC stored in centralized entities.
Users transfer large amounts of BTC from exchanges to maintain ownership in private hardware wallets. Although not shown in the chart, Glassnode also mentioned in a tweet that the miners distribute 100% of the coins mined (which means 100% of the issuance), plus an additional 2% of the existing reserves.
BTC price
At the time of writing, Bitcoin is trading around $22,600, up 8% over the past week.
BTC continues to move sideways | Source: BTCUSD on TradingView
Featured images from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com