Glassnode analysts write a weekly report on the bitcoin blockchain, this week they write that 22 percent of all bitcoins are owned by investors who invested between 2016 and 2019.
In the report notes the think tank that the crypto market as a whole is in a narrow trading range. They conclude this by looking at sentiment and volatility (price volatility).
Do youngsters or veterans have the most bitcoins?
An interesting chart that they highlight this time is HODL waves, which shows the relationship between the number of bitcoins and the ‘age’ of investors.
Source: Glassnode
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- 2-year to 3-year holders rallied in the bear market from late 2018 to the peak of 2019. These investors currently own 9.8% of the supply.
- As of March 2020, 5.2% of the circulating supply has ‘matured’ from the 2y-3y band to the 3y-5y band.
- Holders of 3 to 5 years collected between July 2016 and July 2018, thus representing the buyers of the bull market of the last cycles. This group continues to grow and now represents 13.1% of the supply. These investors bought between 640 and the previous ATH of $20,000 and have endured a lot of volatility.
- Coins between the ages of 6 and 12 months have been bought in this cycle by bull market buyers, who now hold 9% of the coin supply. This age range has been increasing remarkably from early April, indicating that a large proportion of Nov-December 2020 buyers have not issued their coins.
Why is this important? The evolution of these HODL waves over the next three months could reveal how many of the early institutional investors are holding or selling their bitcoin.
Silence before the storm
Last week the bitcoin price opened with $35,128, but fell to a low of $32,227. That’s a swing for ants. According to Glassnode, this trend represents the calm before the storm. This is because there is little activity visible in on-chain statistics and the derived indicators.
Restore computing power
The report also discusses the computing power on Bitcoin’s network. At its peak, computing power would decline by 55%, but this quickly recovered to around 39%.
“And if this level persists and is representative, there will be a hash power of about 29% coming back into the network. This could be related to Chinese miners who have successfully relocated their equipment, as well as previously outdated equipment that has been dusted and given a new lease of life.”
Fewer coins on exchanges again
We often wrote in 2020 and the first quarter of 2021 that there are fewer and fewer coins available on exchanges. Many of these were bought by Grayscale for their GBTC fund, or collected by institutions. This was evidenced by a continued outflow from stock exchanges.
In May, this trend reversed dramatically when a deluge of bitcoins were sent to exchanges, the price plummeted by 50% from then on. In the past two weeks there seems to be a reversal, on average the number of bitcoins on exchanges is decreasing by 2 thousand per day.
Source: Glassnode
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