Recent data from Glassnode, a prominent on-chain analytics firm, reveals an unprecedented milestone in the world of Bitcoin. Long-term holders (LTHs) of the cryptocurrency now control more than 76% of the total BTC supply, marking a historic peak in Bitcoin’s existence. This surge in long-term holding indicates a significant shift in Bitcoin’s supply dynamics.
Long-Term Holders on the Rise
LTHs have been steadily increasing their Bitcoin exposure since mid-2021, demonstrating remarkable resilience through the bear market that followed. This trend has created a scenario where fewer coins are available for trading among other market participants. Notably, Charles Edwards, founder of Capriole Investments, points out that this scarcity has direct implications for the price.
Bitcoin long-term holder (LTH) % BTC supply share chart. Source: Charles Edwards/X
With a significant portion of BTC locked up in long-term storage, the availability of coins for short-term speculators and traders is shrinking. The reduced supply, combined with growing demand for Bitcoin, implies upward price pressure. Edwards emphasizes that while demand has increased significantly since 2015, the constrained supply, especially as Bitcoin approaches its halving event, is likely to drive prices even higher.
Short-Term Hodlers as Market Observers
Conversely, short-term hodlers (STHs), often viewed as speculators, have garnered attention from market observers. The realized price of STH-owned coins, reflecting their support, currently hovers just below $27,000. A break above this level is seen as a bullish catalyst for Bitcoin‘s price.
BTC/USD 1-day chart. Source: TradingView
Bitcoin‘s long-term holders now wield unprecedented control over the supply, ushering in an era of increasing scarcity. This not only alters the dynamics of the market but also bolsters the outlook for Bitcoin’s price. As the crypto market continues to evolve, the dominance of LTHs highlights the enduring appeal of Bitcoin as a long-term store of value, with implications for both investors and speculators.