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Analysis of Bitcoin Holders: Trends and Insights
According to a recent report by Fidelity Digital Assets, there has been a significant increase in the number of Bitcoin holders with at least $1,000 worth of BTC in their wallets. The report highlighted this growth as a positive trend in the adoption of Bitcoin among the general population.
The data revealed that as of mid-March, there were a record-high 10.6 million wallets holding at least $1,000 worth of Bitcoin. This represents a 100% increase from the previous year, indicating a notable surge in small addresses accumulating and saving Bitcoin, despite its rising price.
It is important to note that the metric used in the report may not be entirely accurate due to Bitcoin’s price appreciation and address consolidation over the period. At the current valuation, $1,000 can buy approximately 0.016 Bitcoin, according to data from CoinGecko.
Within the crypto community, Bitcoin holders are often categorized using marine terms, such as “whales” for those holding at least 1,000 Bitcoin and “shrimps” for those with just one Bitcoin. Individuals with less than one Bitcoin could humorously be referred to as “plankton” in this analogy.
Long-Term Outlook for Bitcoin and Exchange Holdings
Fidelity’s analysts provided a positive assessment of Bitcoin’s short-term outlook, based on multiple long-term data points. Among the 16 metrics tracked, half were considered positive, a quarter neutral, and the remaining negative.
One key metric examined in the report was the amount of Bitcoin held on cryptocurrency exchanges. The data indicated a continued downward trend, with a 4.2% decrease in the first quarter of 2024, bringing the total to 2.3 million Bitcoin. This figure is notably 30% lower than the peak of over 3 million Bitcoin held on exchanges in 2020.
Despite this decline, Fidelity’s report cautioned that lower exchange holdings do not necessarily equate to increased self-custody among investors. However, custodians like Fidelity are developing solutions that allow customers to retain control of their keys while utilizing exchange trading services.
One concerning indicator highlighted in the report was the historic levels of paper profits for Bitcoin holders. The analysis revealed that over 99% of Bitcoin addresses were in profit by the end of the first quarter, potentially leading to a higher likelihood of sell-offs as traders and investors seek to capitalize on gains.
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