Bitrabo Editorial
Bitcoin stands out as a deflationary asset with a limited total supply, in contrast to Ethereum, which adjusts its supply based on network activity every year. The total number of Bitcoin (BTC) that can ever exist is capped at 21 million, with over 4 million BTC already deemed irretrievable.
Decreasing Willingness to Sell Bitcoin
Recent analysis indicates that a smaller number of individuals are inclined to sell their BTC. On-chain data assessing the supply cycles of long-term and short-term BTC holders reveals that as of October 2024, less than 10% are interested in selling their coins. This is a significant drop from the 26% willing to sell in mid-2021 and the 64% recorded in 2013.
Notably, both long-term holders—those who bought Bitcoin more than six months ago—and short-term holders—those who purchased in the last 155 days—are showing reluctance to sell. This is surprising given Bitcoin’s known price volatility, which leads to significant fluctuations in value.
This trend can be contextualized by noting that Bitcoin’s price has fallen 15% from its peak in March 2024. Nevertheless, it has surged nearly 150% since the beginning of this year, rising from around $27,000 in October 2023. Bitcoin’s value had previously plummeted to below $16,000 in 2022 after reaching almost $70,000 in November 2021.
The cyclical characteristics of Bitcoin haven’t deterred traders who typically sell during downturns. This evolving perspective among holders suggests increasing optimism regarding Bitcoin’s long-term value and its potential as a store of wealth.
Traders Hesitant to Sell and Institutional Involvement
Several factors may contribute to this trend, prominently the rising interest from institutional investors, especially following the approval of the first spot Bitcoin ETFs in the U.S. early this year.
Data from Soso Value shows that U.S. spot Bitcoin ETF providers manage assets exceeding $57 billion in BTC. Notably, BlackRock oversees over $21.5 billion, while Grayscale has experienced more than $20 billion in outflows since the launch of its derivative product in January, as it unwinds its GBTC.
Furthermore, Adam Buck, the CEO of Blockstream, noted that there are no options available, whether call or put, that extend beyond one year. He suggests this is due to most options traders hesitating to sell their calls, as they would likely be purchased almost immediately.