March 24, 2023

Long-term investors who hold bitcoin [BTC] More keen to hold their bitcoins than spend them, even in the face of rising prices, a new Report Revealed from CoinShares.

a previous post Report, Coinshares found that new investors in the Bitcoin market every halving. Thus, laying the groundwork for a new bull cycle. As its price rises in a bull cycle, the coin has grown in popularity, leading to more investment.

According to its new report, Coinshares speculates that when BTC investors go through a full cycle top and enter a bear market, they won’t sell their tokens for less than the purchase price.

By holding their tokens, they limit the supply, which, according to Coinshares, creates “downside support…during price downturns, until eventually finding profit on the next rally where many start to sell.”

When these investors finally profited, their success encouraged a new generation of long-term holders who were brought into the Bitcoin market and then went through the same cycle as their predecessors.

Source: Coinshares

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As mentioned above, with each halving, new investors flood the BTC market. Following the first halving event in 2012, BTC began to be bought by new entrants and sat idle for 5 years by the end of 2013.

This “holding” of these long-term investors results in a restricted supply of the king coin. Coupled with the halving event in 2016, it contributed to the rapid growth of BTC price in 2017. While these investors turned around, new investors entered the market in 2017.

Investors who bought BTC in 2016 and 2017 continued to hold because the tokens were sitting idle in their addresses, CoinShares found.

According to the report, such investors prefer to hold their assets rather than sell them for more than their acquisition costs. In this regard, CoinShares stated,

“We are seeing the same pattern now, exchanging coins at high bitcoin prices in 2017, with new age investors choosing to resist the urge to sell coins despite the opportunity to make a profit anytime in 2021. The post-halving rally in 2020 provides some explanatory power, when the available Bitcoin supply was again constrained, while also showing that Bitcoin investors in 2017 held similar beliefs to those initiated in 2013.”

Source: Coinshares

Additionally, CoinShares found that long-term investors who entered the market in 2017 “seem to be hoarding their tokens more aggressively than we have seen in past cycles.”

While some investors profited by sending BTC to exchanges during the 2021 rally, outflows from exchanges have outpaced inflows since 2022, the report said. Hence, it shows that long-term buyers in 2017 are still holding on.

Source: Coinshares

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