11.4M Bitcoin Kept As Long Term Investment

11.4M Bitcoin Kept As Long Term Investment

By stvleong | Steven Leong | 21 Jun 2020


The vast majority of Bitcoin (BTC) is kept on a long-term basis according to Chainalysis.
Investment with 60% held by custodians licensed.

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Breakdown of Bitcoin supply. Source: Chainalysis

Digital Gold

The company concluded that the breakdown of Bitcoin's supply is gold-like, supporting the asset's digital gold status. However, they add that it is 3.5 million
BTC actively traded to help the price:

"But this digital gold is supported by an active trading market for the buyers and sellers. The 3.5 million Bitcoin used for trade supplies the market, and determines the price in interaction with the level of demand."

Long-term investors are described as those who have never sold more than 25% of their holdings and that these users have often kept their assets for several years.

340,000 traders weekly
Further study of the Bitcoin supply trading market, Chainalysis found that, while retail traders account for 96% of transactions, professionals move
Multiple volume:

"The large majority of retail traders that we classify as those who deposit less than $10,000 USD of Bitcoin at the same time appear to be 96 percent of transfers sent on average weekly to exchanges. However, professional traders control market liquidity, accounting for 85% of the value of all Bitcoin dollars sent to exchanges."

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Retail versus professional traders. Source: Chainalysis

Furthermore, the company found that by 2020 the maximum number of weekly traders was 340,000.

60% kept with approved guardians

About 60% of the whole Bitcoin supply shall be held by licensed custodians or Virtual Asset Service Providers or VASPs. This figure includes several exchanges. Coinbase alone has nearly 1 million Bitcoin.

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Where Bitcoin is held by type of custodian. Source: Chainalysis

The business estimates that BTC 3.7 million has been destroyed, including the approximately 1.1 million coins that Satoshi Nakamoto possibly had mined.
The role of custodians has increased over time and can fuel those who think that the centralization of the crypto space is too much.

 

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stvleong
stvleong

I'm a Digital Marketing Lead | Crypto Trader | Affiliate Marketer and love to write posts related to crypto and anything that is interesting.


Steven Leong
Steven Leong

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