In a significant development for the world’s leading cryptocurrency, Bitcoin, long-term holders (LTHs) have reached an all-time high, now holding a staggering 78% of the total circulating supply. LTHs are investors who exhibit strong conviction in Bitcoin and tend to hold their coins for extended periods. This group has earned the nickname “diamond hands” due to their unwavering commitment during market fluctuations.
Recent on-chain data reveals a growing trend towards a HODLing mentality among Bitcoin investors, as indicated by the “percent young vs old supply” chart. Over the past couple of years, the percentage of total Bitcoin supply held by LTHs has steadily increased, signifying their belief in the long-term potential of the cryptocurrency.
To add to this positive momentum, blockchain analytics firm Glassnode reports that LTHs have been taking advantage of the recent price dip to accumulate more Bitcoin. The Long-term Holder Net Position Change indicator, which tracks the net amount of Bitcoin entering or leaving exchange wallets held for over six months, has witnessed a surge in the past four weeks. This net accumulation is occurring at the fastest pace since October 2021, suggesting heightened confidence among long-term investors.
Notably, the recent increase of 300,000 coins in long-term holder supply occurred 155 days after the collapse of FTX, a major cryptocurrency exchange. It appears that LTHs, even during a tumultuous event like the FTX collapse, remained resolute in their convictions, demonstrating their steadfast commitment to Bitcoin.
Concurrently, short-term holders have reduced their supply by the same amount of 300,000 coins. Short-term holders typically have a shorter investment horizon and may be more susceptible to market volatility. The shift of coins from short-term holders to long-term holders indicates a transfer of ownership from those seeking quick gains to individuals with a long-term perspective.
The implications of this trend are significant for Bitcoin and its future trajectory. The increasing dominance of LTHs in the circulating supply indicates a growing level of stability and a reduced likelihood of sudden sell-offs that could trigger market downturns. The accumulation of Bitcoin by long-term investors during market downturns also suggests their confidence in the asset’s long-term value and potential for growth.
As the “diamond hands” continue to accumulate Bitcoin during price dips, it reinforces the narrative that Bitcoin is an asset worth holding for the long haul. This influx of institutional and retail investors with a long-term mindset adds further credibility and stability to the cryptocurrency market, attracting more participants and potentially driving the price of Bitcoin higher.
The surge in long-term holder supply, reaching an all-time high, underscores the growing faith in Bitcoin’s future among dedicated investors. Their steadfast commitment and conviction during market volatility, as exemplified by the recent accumulation following the FTX collapse, reinforces Bitcoin’s resilience. This trend may have a positive impact on Bitcoin’s stability, attracting more investors and potentially driving its price upwards in the long run.