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Long-Term Holders of Bitcoin Continuing to Amass Holdings, Says Kraken Report

2 mins
Updated by Ryan James
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In Brief

  • Whales and miners accumulate bitcoin, creating a supply shock, leading to a short-term price rise.
  • The 1-year revived supply, which tracks the movement of coins from long-term buyers, has indicated that investors are not taking advantage of the current surge.
  • BTC Hodl Waves indicator that provides insight into holding and spending behaviors, suggests that early buyers of old coins saw their investments increase by 10.9%, causing them to sell off their holdings in September.
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Kraken’s “Shocktober” report reveals that major Bitcoin miners have maintained their bitcoin holdings even under difficult market conditions.

Kraken recently released a report entitled “Shocktober”, which lent some interesting insights into BTC movement and transaction behavior by mining pools and whales.

BTC’s 1-year revived supply gives a granular view of long-term holder supply activity. The metric presents the volume of coins that become active after being dormant for a specified time frame. From the fourth quarter of 2020 to the first half of 2021, a modest number of coins have re-entered circulation. In September 2021, BTC’s 1-year-revived supply hit $2293, and a 3-year low of $1577.82 was hit earlier in 2021.

BTC’s HODL Waves metric reflects the percentage of BTC’s circulating supply that hasn’t moved over a specific time. This shows that long-term holders did not sell during September’s weakness, nor October’s strength.

A metric called 0-hop supply, which determines mining pool behavior, as it measures whether validators of the Bitcoin network are holding the coins they’ve made, shows that miners hold 20.4K, coins, which they don’t intend on cashing out anytime in the near future. The metric observes the holdings of addresses that received funds from the Coinbase transaction, which is the first transaction of every BTC block, which is paid out directly to mining pools for their Proof-of-Work activity. The metric assumes that coins that have not moved (or hopped) at least once have not been sold or paid out to miners.

Smaller miners have unloaded profits, according to the 1-hop supply metric that tracks their movements. If they choose to keep their profits in the future, this could cause a further supply shock, leading to much higher prices at the end of the year.

In addition to October’s increase in network participants, the number of transactions also increased significantly. Daily transactions reached a 5-month high of more than 284936 on 22 22 October.

Increases in transaction volume

By looking at velocity, which measures the network’s transaction volume relative to its market capitalization, a change in velocity can lend insight into whether the network demand (speed at which BTC is sent around the network) was in step with price appreciation when analyzed along with the trend in price. The 1-year active supply velocity, which is a variant of velocity, measures aggregated volume of all transfers in the previous year divided by the active supply in the previous year. BTC’S 1-year active supply velocity rebounded +4.9% to 10.92x on October 15th.

Whales and miners

Metrics like the 1-year revived supply and HODL waves point to a trend of more coins remaining dormant for longer. Bitcoin whales, who have 100 or more BTC in their wallets, are leading the pack when it comes to long-term holders and increased network demand. The weekly “whale” holdings rose to an all-time high of 11.9M BTC in October.

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David Thomas
David Thomas, a seasoned electronic engineer with nine years of expertise, has built a distinguished career by combining his passion for writing with an in-depth understanding of...