Both of these two opposing groups are hodlers—investors in bitcoin as a long-term offer who refuse to sell their holdings and are determined to crush the bears despite their portfolios being deep in the red.
Shrimp, investors who hold less than 1 bitcoin, collectively add 60,460 bitcoins per month to their balance sheet, the most aggressive rate in history, according to analysis by the data company. glass knot.
Whales with more than 1,000 bitcoins added 140,000 coins per month, the highest since January 2021.
“The market is approaching a hodler-driven regime,” Glassnode said in a note, referring to the cohort whose name came up years ago because a trader misspelled the word “hold” on an online forum.
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After bitcoin’s worst month in 11 years, the decline appears to have slowed in June, Glassnode says, as demand for transactions appears to have moved sideways, indicating stagnation in new entrants and a likely continuation of user baseload i.e. hodlers. .
Bitcoin has hovered between $19,000 and $21,000 over the past four weeks, less than a third of its $69,000 peak in 2021.
“There is a saying in the crypto markets – diamond hands. You didn’t actually lose money if you didn’t take it out. Maybe one day they will grow back,” said Neo, an online pseudonym for a summer graphic designer at a fintech company in Bangalore.
As the crypto bear market enters its eighth month, his crypto portfolio is down 70%, though he said it was money he was “dealing with losing.” He does not intend to sell, counting on a possible rebound in the coming years.
Like Neo, most hodlers’ briefcases are underwater, but many refuse collateral.
About 55% of U.S. retail crypto investors kept their investments in response to the recent selloff, while about 16% of investors globally increased their crypto holdings in June, according to a survey of retail investors conducted by eToro.
“Cryptocurrency is an asset class that is disproportionately owned by younger investors who are more risk tolerant as they have, say, another 30 years to get it all back,” said Ben Leidler, global markets strategist at eToro.
PAIN OF THE MINERS
Another class of persistent crypto hodlers, bitcoin miners, are under increasing pressure as they face the double whammy of falling prices and high electricity costs. According to Citi analyst Joseph Ayub, the cost of bitcoin mining is higher than the cost of digital assets for some miners.
The inhospitable environment for many of these miners who have loans for their mining systems forced them to abandon their stash.
Last month, Core Scientific sold 7,202 bitcoins to pay for its mining rigs and funding operations, bringing its total assets down to 1,959 bitcoins.
Bye Marathon Digital Holdings said it hadn’t sold a single bitcoin since October 2020, the firm said it could sell some of its monthly production to cover costs.
Bitcoin miners’ Valkyrie ETF fell 65% last quarter, outpacing Bitcoin’s 56% drop.
The lessons of the cryptocurrency winter of 2018 were that the surviving miners continued to mine, even while underwater. However, this approach is unlikely to work this time, said Chris Bae, CEO Extended digital groupwhich develops hedging strategies for crypto miners.
For mining bosses, Bae added, the focus now is “on the need to think through the next crypto winter and have that game plan before it happens, not during it.”