Number of Bitcoins in Long-term Investors' Portfolios Hits New High
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Sept. 14, 2021

Long-term investors continue to increase their share of total Bitcoin volume amid renewed market volatility, according to a Glassnode report.

To separate short-term and long-term investors, the firm's analysts have focused on the 155-day mark: in mid-April, Bitcoin was trading at around $60,000 and headed for a new high. In other words, Bitcoins bought after the highs are considered short-term and earlier long-term investors.

At last week's highs around $52,800, more than 16.8% of Bitcoins were in the portfolios of short-term investors. This means there has been a large accumulation of cryptos in the range of the lows around $29,000 over the past few months.

At the same time, the share of Bitcoins in the portfolios of long-term investors reached 79.5%. The indicator was at similar levels in October before the beginning of the bullish phase. In absolute terms, the number of Bitcoins in the portfolios of long-term holders has now reached a maximum and amounts to 12.97 million. Peaks in this indicator usually correspond to the late stages of a bear market and herald the beginning of a bull cycle, analysts say.

At the same time, long-term investors also bought Bitcoins near the highs and are in no hurry to sell them. At the moment, about 421,000 Bitcoins a month are moving into the category of long-term investors. Glassnode experts write:

"Given we have already established that more than 16.8% of the supply was accumulated in the recent $29k to $40k range, there is a good case to be made this trend will continue into October-December (155-days after the May-July consolidation)."

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Analysts consider the current stage in the development of the Bitcoin market to be "unique." For most of the history of cryptocurrencies, there has been an increase in the volume of coins in free circulation. After the final bear market surrender in 2018, exchanges turned neutral, and since the collapse in March 2020, there has been a trend toward an increase in the number of illiquid coins moving from exchange wallets to long-term holder wallets.

After a moderate influx of Bitcoins into exchange wallets in May 2021, growth in the number of illiquid coins resumed. Glassnode concludes:

"It appears that despite significant volatility through 2021, long term Bitcoin investors continue to accumulate and keep coins in cold storage."

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