Only 3.5 million Bitcoin or 19% of the total turnover is actively traded around the world, while the rest is held long term by investors, according to a new report by the crypto analyst Chainalysis.
According to the report, nearly 18.6 million Bitcoin (BTCs) were enforced as of June 2020. Of these, about 60% of BTCs are held by entities – individuals or businesses – who have never sold more than 25% of Bitcoin they have ever known received. This BTC offering is “held for long-term investment.” “
An additional 20% of the existing Bitcoin supply has not gone from its current number of addresses for five years or more – what Chainalysis calls “lost Bitcoin.” The rest – 3.5 million of all mined BTC – is used for trading, mainly between exchanges.
“The data shows that most of Bitcoin is held by those who refer to it as digital gold: a long-term asset,” Chainalysis said in a report released this week.
Only 3.5 million Bitcoin are traded worldwide; Most of the long-term BTC is held as digital gold, says Chainalysis
Image via Chainalysis.
The report noted that Bitcoin held for long-term investment would become a source of liquidity due to more people looking to trade the top crypto, which is becoming rare following the recent May 11 supply cut.
The analysis shows that during 2020, 340,000 BTCs are actively traded every week. There are two types of merchants, retail and professional, it says. Retail traders are the ones who deposit Bitcoin worth less than $ 10,000 on exchanges at a time. However, they account for 96% of all flow to stock exchanges per week.
Professional traders make up only 4% of active traders – or around 39,000 transfers each week. However, they control market liquidity, accounting for 85% of all Bitcoin’s US dollars sent to stock exchanges, according to the report.
“For this reason, professional traders are the most significant contributors to large market movements, such as those seen during the Bitcoin dramatic price decline in March as the Covid-19 crisis in North America intensified,” Chainalysis said.
An average of $ 1.8 million has been transferred so far this year, worth $ 14.4 billion.