A recent report by Chainalysis shows that much of the current Bitcoin supply is being held as a long-term investment by the cryptocurrency's largest investors.
Chainalysis, a recognized and powerful firm that provides intelligence tools for the investigation and analysis of cryptocurrencies, and technology blockchain, published a report recent where it explains that most of the bitcoins currently in circulation are held as a long-term investment by users, as if they were digital gold.
The firm notes that most mined bitcoins are treated as a digital asset that is in the hands of those who consider it gold 2.0 or digital gold. Chainalysis also highlights that the current price of the cryptocurrency is maintained by only 19% of the total bitcoins in circulation, indicating that this percentage is used to supply the market in interaction with the level of demand that currently exists.
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Details on the Chainalysis report
The research firm notes that of the 18,6 million bitcoins mined as of June 2020, approximately 60%, about 11,4 million BTC, are held in entities and custody services for Bitcoin. Chainalysis also points out that these people or companies have never sold more than 25% of the Bitcoin they own, which is why these cryptocurrencies are labeled by the firm as long-term investments.
Similarly, studying the rest of the BTC in circulation, Chainalysis states that around 20% of bitcoins have not been moved for more than 5 years. The firm estimates that this may be due to erroneous transactions, damage to equipment containing a wallet, or the loss of the wallet itself. private keys of the users; considering that A total of 3,7 million bitcoins are lost coins.
Likewise, the firm also points out that An average of 3,5 million BTC are currently active within the exchanges; so this amount of BTC is what maintains the current price of Bitcoin in the markets thanks to its constant mobilization.
The growing adoption of Bitcoin means that more and more users are joining the technology every day; however, with each passing day the cryptocurrency also becomes scarcer as a new block is mined. For this reason, Chainalysis estimates that Bitcoin could become a crucial element of liquidity in the markets if the cryptocurrency reaches a value that tempts investors to sell, or if early adopters still have their private keys.
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Retail and professional Bitcoin traders
According to the firm, it is estimated that there are tens of millions of people who own Bitcoins, but only an average of 5 million visit the exchanges and trading houses that trade in this cryptocurrency each week. Similarly, Chaninalysis states that so far in 2020 only about 340 thousand people are active and make transactions with Bitcoin on a recurring basis.
Although the firm cannot determine which of these users are individuals and which are not, it estimates that based on the size of the transactions, it can divide them into two large groups: retailers and professionals, as shown in the following graph.
Source: Chainalysis
The graph shows that users who make transactions for values close to or less than $10.000 are considered as retailers, and account for 96% of all weekly transactions made with the cryptocurrency. While the group of professionals, which represents only 4% of weekly Bitcoin users, are the ones who move and control the liquidity of the cryptocurrency in the market, with approximately 84% of the value of this asset in USD under their power.
Source: Chainalysis
Finally, the Chainalysis study indicates that approximately 60% of bitcoins are held by authorized exchanges and custody services, which are licensed as virtual asset service providers. It also points out that 40% of the BTC moved so far in 2020 are moved directly on cryptocurrency exchanges such as Huboi, Binance, Coinbase and Bitfinex.
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