Despite the failure of several high-profile companies, retail investors are buying more Bitcoin this year. Long-term holders also control the greatest proportion of BTC supply ever.
The crypto world is not all doom and gloom. Despite a 75% drop in price, Bitcoin on-chain metrics remain positive.
According to Glassnode’s on-chain analysis, retail traders now hold a record 17% of BTC supply. Retail investors, according to the company, are those with wallets containing fewer than ten coins. According to the chart, retail holdings have also increased significantly in the last month or so.
Will Clemente, co-founder of Reflexivity Research, stated on December 20: “Not perfect yet, but solid for a 12-year-old asset and definitely trending in the right direction.”
During a market downturn or a period of media FUD, retail investors are usually the first to panic sell (fear, uncertainty, and doubt). That has undoubtedly occurred in 2022, as it did in 2018 after the ICO (initial coin offering) crackdown.
Furthermore, retail investors are usually late to the party, arriving only after the bull market has fully established itself. Long-term and institutional investors are a little wiser because they are accumulating at the bottom of the cycle, which is currently.
According to a recent Coinbase Institutional report, long-term Bitcoin holders now own 85% of the circulating supply.
According to Glassnode, the ‘hodler’ supply reached a record high of 13.9 million BTC this month. It reported that long-term Bitcoin holdings amount to approximately 72.3% of the circulating supply. Long-term holders, on the other hand, are those who keep the asset for more than 180 days.
Nonetheless, despite the market turmoil this year, both metrics indicate that there is still a lot of conviction and confidence in Bitcoin.
Coinbase also stated that in 2023, “high-quality” assets will be preferred over altcoins. For the next few months, institutional investors will primarily favour BTC and ETH until the liquidity crisis has passed.
Today’s crypto markets are trading sideways with minor gains. Total market capitalization is around $844 billion, which is not far off the cycle low set last month.
Analysts believe that the low volatility and sideways trading will continue well into 2023.
“We believe there is a low probability that crypto performance will decouple from traditional risk assets in the first few months of 2023,” Coinbase researchers wrote.