60% of Bitcoin is held for long term investment! 60% of Bitcoin is held by licensed custodians, according to Chainalysis.
Chainalysis concludes that the breakdown of Bitcoin’s supply makes it similar to gold. They did clarify, however, that 3.5 million BTC exchanged hands which supports its price.
“But this digital gold is supported by an active trading market for those who prefer to buy and sell frequently. The 3.5 million Bitcoin used for trading supplies the market, and, in interaction with the level of demand, determines the price.”
Chainalysis defines long term investors as those who have never sold more than 25% of their holdings. Most of these holders have had their assets for many years.
Chainalysis also found that while retail traders are responsible for 96% of transactions, professionals move the bulk of the volume for BTC.
“Retail traders, whom we categorize as those who deposit less than $10,000 USD worth of Bitcoin on exchanges at a time, appear to be the large majority, accounting for 96% of all transfers sent to exchanges on an average weekly basis. Professional traders, however, control the liquidity of the market, accounting for 85% of all the USD value of Bitcoin value sent to exchanges.”
Chainalysis also concluded that the number of weekly traders in 2020 was no more than 340,000.
They also noted that approximately 60% of the entire Bitcoin supply is held by licensed custodians, or Virtual Asset Service Providers. Coinbase alone, for example, holds close to 1 million Bitcoin.
Chainalysis assumes 3.7 million BTC to be lost. What do you think? Let us know on our Facebook Page!