Latest version of Bitfinex Alpha a report It shows a shift in Bitcoin ownership. Short-term investments are rising, driven by the popularity of spot bitcoin ETFs, while long-term bondholders remain confident in the market.
Recently, there has been a noticeable change in Bitcoin (BTC) ownership in the cryptocurrency market, especially among short-term holders.
Short-term Bitcoin investors, i.e. those who typically hold Bitcoin for less than 155 days, have dramatically increased their activity. Their combined holdings rose from 2.2 million BTC in January to over 3.4 million BTC by mid-April – that's nearly a 55% increase.
This rise is mainly related to the growing influence of spot Bitcoin ETFs.
Short-term holders versus long-term holders
According to the report, the increase in the number of short-term holders indicates a strong level of investment in Bitcoin, driven by the launch of spot Bitcoin exchange-traded funds and its growing popularity. The concentration of these short assets near the current market price indicates significant investment activity at this specific price point. However, short-term equity holders also experience weakness and price volatility, which can lead to potential risks or price declines.
The number of short-term coin holders is steadily rising due to new players entering the market and purchasing Bitcoin. However, the price remains the same because old coins are distributed. The market is still in a reset phase, and a price point between $60,000 and $70,000 will be the new minimum for BTC, just as $10,000 became the norm in 2020.
The supply held by short holders currently stands at around 3.3 million BTC, a slight decline from the mid-April peak. This decline is due to the market correction in March which occurred after Bitcoin reached an all-time high.
Bullish sentiment for long-term BTC holders
On the other hand, long-term Bitcoin holders are showing a great show of confidence in the market. After Bitcoin hit a new all-time high of $73,666 in March, many long-term holders sold large amounts of their Bitcoin.
Recent data shows that the Bitcoin selling trend has stopped, and instead, long-term Bitcoin holders are now starting to accumulate Bitcoin. The amount of Bitcoin held by investors for over a year has remained virtually unchanged, suggesting that these investments are being held rather than actively traded.
Furthermore, only about 0.03% of the supply held by long-term investors consists of coins purchased at prices above the current spot price. In the early stages of a bull market, it is common to see long-term investors holding on to their profitable positions.
Bitcoin whales are also accumulating Bitcoin at a pace reminiscent of the pre-2020 bull market, leading to a new historic high in their Bitcoin balance.