Recently, there has been a notable change in Bitcoin (BTC) ownership within the crypto market, particularly among short-term investors.
Short-term Bitcoin investors, typically holding Bitcoin for less than 155 days, have significantly increased their activity. Their combined holdings rose from 2.2 million BTC in January to over 3.4 million BTC by mid-April—a nearly 55% increase. This surge is mainly linked to the growing impact of spot Bitcoin ETFs.
The rise in short-term holders indicates strong investment in BTC, driven by the launch and growing popularity of spot Bitcoin ETFs. The concentration of these brief asset holdings near the current market price points to substantial investment activity at this price level. However, short-term holders also introduce vulnerability and price fluctuations, leading to potential risks or price drops.
The number of short-term holders continues to grow as new players enter the market and purchase Bitcoin. However, the price remains stable because older coins are being redistributed. The market is still resetting, and the $60,000-70,000 price point is expected to become the new floor for BTC, similar to how $10,000 became a base in 2020. The supply held by short-term holders is currently around 3.3 million BTC, which is a slight decline from the peak in mid-April. This decrease resulted from the market correction in March that followed Bitcoin reaching its all-time high.
On the other hand, long-term Bitcoin holders are showing remarkable confidence in the market. After Bitcoin reached a new all-time high of $73,666 in March, many long-term holders sold significant amounts of their BTC. Recent data shows that this trend of selling has stopped, with long-term holders now starting to accumulate Bitcoin. The amount of Bitcoin held by investors for over a year has remained almost unchanged, indicating that these investments are being held rather than actively traded.
Furthermore, only about 0.03% of the supply held by long-term investors comprises coins bought at prices higher than the current spot price. In the initial stages of a bull market, it is common to see long-term investors holding onto their profitable positions. Bitcoin whales are accumulating Bitcoin at a rate similar to the pre-2020 bull run, resulting in a new historical high in their Bitcoin balances.
