On-chain data shows Bitcoin long-term holders now hold 78% of the total circulating supply, the highest value the metric has ever seen.
Bitcoin Long-Term Holders Are Sitting On 78% Of The Total Supply
As pointed out by an analyst on Twitter, the divergence between the long-term holders and the short-term holders is at its greatest right now. The long-term holders (LTHs) and the short-term holders (STHs) are the two main holder groups that the entire Bitcoin market can be divided into.
The STHs include all investors that bought their coins within the last six months, while the LTHs include those who acquired their BTC earlier than this threshold amount.
Statistically, the longer investors hold onto their coin, the less likely they become to sell at any point. Thus, the LTHs generally tend to keep their coins dormant for longer periods than the STHs. Because of this reason, the LTHs are also often referred to as the “diamond hands” of the Bitcoin market.
Now, the relevant indicator here is the “percent young vs old supply,” which measures what percentage of the total circulating BTC supply is currently being held by the STHs (the “young” supply) and what’s being held by the LTHs (the “old” supply).
Here is a chart that shows the trend in this Bitcoin metric over the entire history of the cryptocurrency:
The two supplies seem to have diverged away from each other in recent months | Source: Glassnode on Twitter
As shown in the above graph, the percentage of the total Bitcoin supply held by the LTHs has only continued to go up for a couple of years now, suggesting that there has been a growing shift towards a HODLing mentality amongst the investors in the market.
While this has happened, the percentage contributed by the STH supply has naturally shrunk, as its value is simply calculated by subtracting the LTH percent supply from 100.
One recent brief decline was observed following the collapse of the crypto exchange FTX, which suggests the crash was able to shake even the strongest hands in the market. However, it wasn’t long until holders regained focus and the supply once again started climbing up.
After this latest accumulation by the cohort, the percentage of the supply held by them has reached a value of 78%. The STHs make up for the remaining 22% of the supply.
From the chart, it’s apparent that this divergence between the two Bitcoin supplies is at the greatest-ever level at the moment. This means that selling pressure from most of the supply should be the least ever now, as it is likely to remain dormant for extended periods with the LTHs.
Such a supply shock in the market can be bullish for the price of Bitcoin in the long term.
At the time of writing, Bitcoin is trading around $23,500, up 2% in the last week.
Looks like BTC has continued to consolidate in the last few days | Source: BTCUSD on TradingView