Bitcoin (BTC) is experiencing a scarcity trend as the latest data from on-chain analytics firm Glassnode reveals that a record percentage of the available BTC supply is held by long-term holders (LTHs).
According to Glassnode’s data, more than 76% of Bitcoin’s supply is locked up in long-term storage, the highest percentage in Bitcoin’s history. Despite the continuous increase in supply with each block, the low-time preference Bitcoin investor cohort has a significant market presence.
Charles Edwards, the founder of quantitative Bitcoin and digital asset fund Capriole Investments, acknowledged this achievement and noted that it surpasses the previous record set in 2015. He emphasized that the increased percentage of supply held by LTHs means that coins available to other market participants are becoming scarcer, leading to increased competition for fewer coins.
An accompanying chart provided by Glassnode illustrates the significant increase in BTC exposure by long-term holders since mid-2021. These LTHs have been holding onto their Bitcoin through bear markets, causing a decrease in the percentage of supply they control only during brief periods. Edwards explained that while the demand for Bitcoin fluctuates, the trend trajectory is clear. The reduced supply combined with increasing demand is expected to put significant upward pressure on the price of Bitcoin, especially considering the upcoming halving event.
On the other end of the spectrum, short-term hodlers (STHs) or speculators are also of interest to market observers. The realized price of the STH cohort, which represents the price at which STH-owned coins were last moved, has been functioning as a support level throughout this year. Recent data shows that this support trend remains valid, with the STH realized price sitting just below $27,000. Breaking above this level is seen as an important bullish signal for BTC/USD.
Market data from Cointelegraph Markets Pro and TradingView indicates that Bitcoin has been able to hold the $28,000 support level after reaching two-month highs. This stability reassures investors and further strengthens the bullish sentiment in the market.
It is worth noting that in August, the historically low BTC exposure among STH entities was already noticed, which further highlights the scarcity trend in Bitcoin’s supply dynamics.
As always, it is important to mention that this article does not provide investment advice or recommendations. Investing in cryptocurrencies involves risks, and readers are advised to conduct their own research and analysis before making any investment decisions.