Long-term Bitcoin investors are facing a period where their patience and belief are paying off as the largest cryptocurrency surpasses $50,000, reaching its highest level in recent years. According to Glassnode’s data, even though Bitcoin’s price remains 28% below its all-time high of $69,000, the number of BTC held at a loss is rapidly decreasing, with only 13% in this category.
Long-Term Bitcoin Investors Engage in Trading Activities
An analysis of investor behavior in the Grayscale Bitcoin Trust (GBTC) reveals that long-term investors have traded approximately 148,000 BTC since the previous November. This indicates a potential shift towards profit realization and portfolio rebalancing.
Glassnode notes that as the market approaches the 2021 peak levels, there is a gradual decrease in the supply of Bitcoin held at higher levels, suggesting that a significant majority of investors are now in a profitable position. This situation points to a potential transition phase where long-term investors may start liquidating some of their assets.
Before the approval of spot Bitcoin ETFs in January, Glassnode noted an increase in speculative activities, encouraging many long-term investors to trade their BTC for profit or to adjust their portfolios.
The supply balance of Bitcoin held by long-term investors has decreased by approximately 299.5 thousand BTC to 14.996 million BTC since peaking in November.
However, considering the activities of GBTC, which saw an inflow of over 661,000 BTC throughout 2021 and classified its supply under the ‘long-term holder’ status, is important. With an outflow of about 151.5 thousand BTC from GBTC, the remaining 148,000 BTC indicates a distribution trend among this group as the market approaches its all-time high levels.
According to Saylor, Bitcoin Gains Momentum from Spot ETFs
Despite recent profit-taking events causing a correction in Bitcoin’s price, investor sentiment remains optimistic. Michael Saylor, co-founder of the largest institutional Bitcoin investor MicroStrategy, links the recent price increase to the launch of spot Bitcoin ETFs and notes that demand for this unique product available to individual investors has exceeded supply from natural sellers. Saylor estimates this demand to be ten times greater than the supply from miners.
With the latest data, Bitcoin has risen 1.86% in the last 24 hours, trading above the $50,000 level, around $51,000. The largest cryptocurrency had dropped to $48,500 after the release of the US January inflation data yesterday, which came in higher than expectations.
