According to on-chain data, some non-whale Bitcoin investors appear to have had no problems with the cryptocurrency bear market or the fear, uncertainty, and doubt (FUD) surrounding the downfall of FTX.
As shown in recent research by the blockchain analytics platform Glassnode, smaller retail investors have begun accumulating more BTC despite the ongoing market instability. The data indicates that there are at least two categories of retail Bitcoin investors who have been stockpiling a record number of BTC since FTX’s demise.
Shrimps, the first class of investors, are those with less than 1 Bitcoin ($16,500) in their possession, while crabs, the second class of investors, are those with up to 10 Bitcoins in their possession.
Following the FTX crisis in early November, “Shrimp” investors are said to have added 96,200 BTC (worth $1.6 billion) to their portfolios, which is an “all-time high balance increase.” According to Glassnode, this group of investors holds 1.21 million BTC ($20 billion), or 6.3% of the 19.2 million coins that are now in circulation.
Over the previous 30 days, “crabs” have purchased around 191,600 BTC (worth $3.1 billion), which is also a “convincing all-time high,” according to the researchers. The new milestone surpassed the previous BTC accumulation record set by crabs in July 2022, when monthly purchases peaked at 126,000 BTC (worth $2 billion).
However, whale Bitcoin investors have been selling as crabs and shrimp have been acquiring record amounts of the cryptocurrency. Glassnode reports that during the previous month, Bitcoin whales have given up roughly 6,500 BTC ($107 million) to exchanges, which is still a relatively small amount of their overall holdings of 6.3 million BTC ($104 billion).
Given recent market developments, including FTX becoming the focus of a significant industry crisis involving allegations of fraud and money laundering, the behaviour of shrimp and crabs seems to be particularly noteworthy.
On the other hand, miners have been facing a difficult situation as their profitability dips. Todayq News has reported that miners are selling 135% of the coins they have produced. Which means that Bitcoin miners are tapping their HODL wallets and reserves. By selling their reserves, they are aiming to offset the growing electricity prices that are ultimately decreasing the profitability of mining activities.
Currently, Bitcoin mining is merely a game of survival of the fittest because mining difficulty and network hashrate are inversely correlated. As more miners fail, the difficulty will decrease and the market will remain afloat. To put it another way, when Bitcoin mining becomes less profitable, miners will begin to leave the industry and the network difficulty will go down.
However, despite the current issue, several significant Bitcoin investors continue to remain bullish on the currency, especially now that El Salvador’s government has begun buying BTC on a daily basis as of November 17.
Elon Musk, the CEO of Twitter, also voiced his belief that Bitcoin “will make it” despite the difficulties facing the industry right now, although he warned that there might be a “long crypto winter.”
After FTX’s collapse, Bitcoin dropped roughly $6,000 in value, falling from about $21,000 to about $16,000 in mid-November. Over the past two weeks, the cryptocurrency has been edging up but reached two year lows as well. As of publishing, Bitcoin is trading at $16,435.30 up 1.60% since yesterday.