The bullish case for Bitcoin as 2022 draws to a close

[ad_1]

The price of Bitcoin (BTC) has seen drastic drops throughout 2022 and is trading at $16,877.39 at press time, down more than 66% from its all-time high of over 68,000. $ in November 2021.

Most investors regard price as the most important measure of growth. While Bitcoin price gives little reason to be bullish, an assessment of other growth indicators argues for BTC growth in the coming years.

Long-term holders hit all-time high

The total supply of Bitcoin held by long-time users increased throughout 2022. But it should be noted that it was shifted during major events like the Terra-LUNA fiasco in May, the bankruptcy of the hedge fund Three Arrows Capital (3AC) in June and crypto lender Celsius in July, and the fall of FTX in November. These events created a short-term panic that led long-term holders to dump their BTC holdings.

Despite the declines, however, the total supply of long-term holders reached an all-time high of over 13.9 million BTC, according to Glassnode data analyzed by CryptoSlate. This indicates that long-term investors hold around 72.7% of Bitcoin’s circulating supply of 19.24 million coins, the highest on record. Long-term holders are those who have held Bitcoin for 155 days or more.

Total supply of BTC held by long-term holders. Source: Glassnode

Moreover, the BTC HODL Waves chart indicates that the number of early BTC enthusiasts who have held their coins for more than 10 years (purple) is high, despite the drop after the collapse of FTX. The HODL Waves chart shows the amount of BTC held for different age bands.

BTC HODL waves. Source: Glassnode

The percentage of investors holding their BTC for 7-10 years has remained broadly stable despite market fluctuations throughout 2022, indicating that long-term holders are maintaining their belief in BTC.

Nearly 1.8 million BTC bought between $15,700 and $17,100

According to data from Glassnode, almost 1.8 million BTC, or more than 9% of the circulating supply, were purchased in the price range of $15,787.73 and $17,160.58. BTC only traded in this price range in November 2020 and this year since November 2022.

While the 9% volume indicates there is a likelihood of more redistribution, Bitcoin’s consolidation suggests that long-term holders are in control.

Breakdown of realized price UTXO adjusted by BTC entity. Source: Glassnode78% of Bitcoin’s circulating supply is in self-custody

The series of high-profile bankruptcies of crypto lenders and centralized exchanges, including Celsius and FTX, have learned an important lesson among investors, not your keys, not your coins. While this phrase has been around for years, with millions of investors collectively losing tens of billions in 2022, the message finally caught on.

Throughout the year, mobs of investors continued to take control of their assets amid a loss of faith in centralized exchanges. More than 15 million coins, or about 78% of the circulating supply of 19.24 million BTC, were illiquid as of December 27. The illiquid supply indicates that BTC is stored in hardware cold storage wallets or web-based and mobile-based non-custodial wallets that are not available for trading.

Illiquid supply of BTC. Source: Glassnode

The illiquid supply of BTC fell from around 14.8 million coins or 76% of the circulating supply in August. Additionally, the illiquid supply of Bitcoin has increased by around 7.4% from just over 14 million coins at the start of the year.

[ad_2]