According to Glassnode data, Bitcoin’s [BTC] volatility has decreased significantly over the last month. This low volatility has enticed both retail and institutional investors to take advantage of the opportunity to invest in cryptocurrency.
One reason for this could be that in previous instances when Bitcoin experienced low volatility, such as in April 2019 and August 2020, BTC rallied in the short term and saw its price rise.
The data provided by Glassnode indicated interest from both large and small investors. For example, the number of addresses holding 0.1 or more coins hit an all-time high of 4,212,110. Furthermore, the number of addresses holding 10 or more coins reached 155,417, a two-year high.
Although interest from both large addresses and retail investors may benefit BTC in the short term, a large concentration of Bitcoin held by BTC whales may expose retail investors to sudden price movements. These movements could be the result of whale behaviour.
Miner interest may rise in tandem with retail interest. This was due to an increase in miner revenue. According to Glassnode data, total miner revenue for Bitcoin increased over the last few weeks from 573 BTC to 978 BTC. A rise in miner revenue may alleviate the selling pressure on Bitcoin miners.
Furthermore, over the last month, the mining hashrate, which measures the processing power of the Bitcoin network, increased by 0.87%. A high hashrate indicates that the BTC network is still very secure.
Hut8 Mining Corp’s recent announcement is another plus for the mining industry. Which stated that in 2022, it mined 3,568 Bitcoin, increasing its reserves by 65% to 9,086 BTC. Hut8 stated that it intends to stick to its HODL strategy, and in December deposited 100% of the self-mined Bitcoin into custody.
Bitcoin’s market cap dominance has grown over the last three months in terms of market performance. According to Messari, BTC’s market cap dominance was 39.192% at press time.
Overall, the decrease in Bitcoin volatility may be a positive sign for the cryptocurrency in the future. Furthermore, rising interest from both retail and institutional investors, as well as rising miner revenue, could point to a bright future for BTC.