Long-term Bitcoin investors have seen their patience and conviction rewarded thanks to the crypto asset’s rally to multi-year highs above $50k. According to the latest data from Glassnode, although Bitcoin prices are still 28% below their all-time high, the number of BTC held at a loss is decreasing rapidly, with only 13% falling into this category.
Taking into consideration the behavior of GBTC (Grayscale Bitcoin Trust), long-term holders have traded approximately 148,000 BTC since November of last year. This suggests a potential shift in investor actions, with some BTC being spent and profit-taking becoming more common.
Bitcoin Investors Reap Rewards
As the market approaches its highs from 2021, Glassnode found that the supply of Bitcoin held at levels higher than this is gradually diminishing. This shift means that a significant majority of investors and their held assets are now in a profitable position, signaling a potential transition phase where long-term holders may begin to divest some of their holdings.
Leading up to the approval of spot Bitcoin ETFs in January, the on-chain intelligence platform observed a notable increase in speculative activity in the market. In response, many long-term holders opted to trade their BTC, either to realize profits or possibly to adjust their portfolios to include the new ETF offerings.
Overall, the balance of supply held by this cohort of Bitcoin holders has decreased by approximately 299.5k BTC since reaching its peak in November of the previous year, totaling 14.996 million BTC.
However, it’s important to take into account the activity of the GBTC product, which saw an influx of over 661k BTC throughout 2021, categorizing its held supply under ‘long-term holder’ status.
With approximately 151.5k BTC worth of outflows from GBTC, the remaining 148k BTC worth of supply attributed to long-term holders indicates a trend of distribution among this group as the market approaches its all-time high price.
Increased Demand for Bitcoin
Despite the profit-taking events that led to the correction of Bitcoin this week, investors appear to be optimistic about its trajectory.
MicroStrategy co-founder and Bitcoin bull Michael Saylor said that the recent introduction of spot BTC ETFs is driving up the price of the premier crypto.
During a recent interview with CNBC, the exec attributed this to a significant disparity in the supply of Bitcoin and the considerable demand accumulated over nearly a decade for a dedicated product accessible to retail investors. He even went on to assert that the demand for Bitcoin entering these ETFs is ten times greater than the supply from natural sellers, primarily miners.
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