Bitcoin has attracted a new generation of hodlers in the last three years, as resilient investors are steadfastly holding onto their assets.
Data from the widely used HODL Waves metric reveals that individuals who purchased Bitcoin in late 2020 have chosen to retain their coins without selling.
Long-Term Holders Continue to Accumulate Bitcoin
Despite the 2023 bull run that has propelled Bitcoin prices to their highest levels in over a year, long-term holders (LTHs) of Bitcoin are showing no inclination to reduce their exposure. The positive momentum in Bitcoin’s price has been attributed, in part, to the anticipation of the first U.S.-listed spot Bitcoin exchange-traded funds (ETFs).
- The HODL Waves metric, which categorizes the Bitcoin supply based on the time elapsed since each coin last moved, reveals a notable increase in a specific age band over the past year.
- Since the bottoming out of the bear market at the end of December 2022, coins which were not moved for more than two to three years have considerably increased their presence in total supply. Their share, which was around 8% of the supply in December of the previous year, has now surpassed 15% to reach 16%.
- This means that people who bought bitcoin between December 2020 and December 2021 resisted being tempted to take mass profits, which is a sign of their determination to keep investing.
- The Realized Cap HODL Waves, which illustrate the relative weighted value of coin cohorts, also demonstrate the most significant gain in the percentage of the total realized cap coming from two to three-year-old coins.
According to data from the on-chain analytics firm Glassnode, as of December 6, the figure for Bitcoin controlled by LTHs stood at 14.92 million BTC, slightly below the all-time highs of 14.95 million BTC (76.3% of the supply) observed on November 28.
Short-Term Holders are Selling
According to information from Coingoeck, in spite of the resilience of Long Time Holders, Bitcoin's annual growth rate has reached a stunning 165% since last year which reflects its total strength and positive performance.
In contrast to the steadfast long-term holders (LTHs) of Bitcoin, short-term holders (STH) or speculators have increased profit-taking activities over the past week. Following the sudden rise in Bitcoin prices to over $40,000, these investors quickly sold off their holdings resulting in BTC liquidation of almost $4.5 billion within several days.
This significant drop in prices did not have much impact on the spot markets, where LTHs were already holding an increasing portion of supply compared to this time before.