The Rise of Long-Term Bitcoin Holders and Decreasing Bitcoin Balances on Exchanges

Introduction

Since October of last year, a notable shift has occurred in the Bitcoin (BTC) community. James van Straten, a research and data analyst, shared an interesting observation in a tweet. According to him, there has been an increase in long-term Bitcoin holders while exchanges have been experiencing a decline in their Bitcoin balances.

Decreasing Bitcoin Balances on Crypto Exchanges

According to van Straten, a divergence occurred in October of the previous year. Currently, there are 2.3 million Bitcoins held on exchanges, while another group of 2.9 million Bitcoins has been held by long-term holders for 10 years.

Figure 1: Bitcoin price (light gray), Bitcoin balances on exchanges (black), and Bitcoin held for over 10 years (orange) – Source: James van Straten on Twitter.

The tweet further claims that over time, the number of Bitcoins on exchanges is becoming a smaller proportion of the total supply. The change in the trend that began in October last year is due to the decrease in exchange balances, while the number of Bitcoins held by long-term holders continues to rise.

Possible Implications for Bitcoin Price

This observation can have various implications for the Bitcoin market. Firstly, it may indicate an increasing level of confidence in the long-term value of Bitcoin, as a significant number of BTC is being held for a prolonged period.

Secondly, the decrease in the number of Bitcoins on exchanges could point to a reduced supply, which in turn may affect the price. Lastly, this trend may also indicate a shift in the dynamics of supply and demand, which can impact future price movements.

However, in the short term, the sentiment remains uncertain. Recently, the BTC price experienced a significant decline and reached a critical price point, forming what is known as a “death cross.”

Conclusion

The rise of long-term Bitcoin holders and the decreasing Bitcoin balances on exchanges highlight an interesting development in the Bitcoin market. This trend suggests a potential increase in confidence in Bitcoin’s long-term value, as well as the possibility of reduced supply and its impact on price. It will be interesting to see how these dynamics further evolve in the future.

Tags: Beurzenbezitters, Bitcoin, HODL