Originally published on: November 27, 2024
In a single day, Bitcoin long-term holders pocketed over $2 billion in profit, showcasing the strength of seasoned investors in the crypto market. However, not everyone is rushing to sell their BTC holdings, revealing a nuanced landscape of cryptocurrency ownership.
Glassnode, a prominent analytics firm, recently highlighted a divergence among Bitcoin investors in its newsletter, “The Week Onchain.” While speculative traders faced liquidation events amid Bitcoin’s price surge towards $100,000, long-time holders opted to capitalize on their gains by offloading some of their coins.
Despite concerns about a potential imbalance between selling and fresh capital inflows, particularly from US spot Bitcoin exchange-traded funds (ETFs), Glassnode reassured that core Bitcoin veterans remained steadfast in their commitment to the cryptocurrency.
By scrutinizing the composition of the supply sold, Glassnode identified a trend where profit-taking activities were predominantly driven by entities holding coins for six to twelve months. In particular, coins aged between 6 months and 1 year represented a significant portion of the total profit realized.
One hypothesis suggested that institutional buyers, who entered the market post-ETF launch with the intention of riding the next market rally, contributed to this wave of profit-taking. Meanwhile, data on ETF netflows indicated a correlation between short-term BTC price movements and capital movements in these funds.
Recent trading activity saw a net outflow of over $550 million from US spot Bitcoin ETFs in response to Bitcoin’s price fluctuations. As BTC/USD retreated from nearly $100,000 to around $90,800, investors across various markets, including equities, navigated turbulent waters.
For instance, MicroStrategy, a prominent business intelligence firm renowned for its substantial Bitcoin holdings, experienced a significant drop in its stock price following a record-breaking four-day losing streak. Despite this setback, the company continued to add to its Bitcoin reserves, underscoring its long-term conviction in the cryptocurrency.
As with any investment decision, it’s crucial to conduct thorough research and exercise caution. Cryptocurrency markets are known for their volatility and unpredictable nature, making it essential for investors to stay informed and make informed choices.
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