Shift in Bitcoin Landscape: Long-Term Holders Increase Their Stakes

As Bitcoin continues to dominate headlines, a crucial statistic reveals a surprising twist

by Faruk Imamovic
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Shift in Bitcoin Landscape: Long-Term Holders Increase Their Stakes
© Getty Images News/Chris McGrath

As Bitcoin continues to dominate headlines, a crucial statistic reveals a surprising twist: The cryptocurrency's long-term holders, or LTHs, control a record 76.2% of the total available BTC supply. This unprecedented shift has sent ripples through the market, signaling that Bitcoin is becoming increasingly scarce, especially for new entrants or speculators.

Locked-In: BTC's Long-Term Investor Dominance

On-chain analytics firm Glassnode's latest report underscores that a significant portion of the available Bitcoin supply is now locked away in long-term storage. This movement showcases the heightened confidence of LTHs, even as the total BTC supply continues to grow with every mined block.

Charles Edwards, the founder of Capriole Investments, highlighted the significance of this trend. “A record 76.2% of the Bitcoin network is locked up with long-term holders today,” Edwards stated on Oct. 18, comparing it to the previous peak in 2015.

He emphasized the implications: "Less liquid supply means the same people are bidding on fewer coins. You do the math." A look at Glassnode's chart further deepens the intrigue. It indicates that from mid-2021, LTHs have increased their Bitcoin holdings dramatically, maintaining their positions even through the most recent bear market.

Only on rare occasions have they reduced their hold over the BTC supply.

Demand Dynamics: The Unfolding Bitcoin Story

While the percentage of LTHs is historically high, it's essential to understand the nuances of the market demand for Bitcoin.

Edwards, in private comments to Cointelegraph, elucidated, "I don't mean demand is the same as 2015. I mean that for the same given demand, and a reduced supply means price must go up (supply/demand economics)." He further elaborated on the notable change in Bitcoin's demand dynamics.

"But in reality, demand has increased quite a lot since 2015, so it should put even more upward pressure on price for this cycle. We have never had Bitcoin's supply this constricted going into a halving." In essence, as the tug-of-war between supply and demand continues, Bitcoin's landscape is evolving.

The newfound scarcity, coupled with growing demand, is bound to shape its future trajectory, making it a space to watch closely for investors and spectators alike.

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