Bitcoin is becoming increasingly scarce, and its price movements are finally reflecting this trend.
Recent statistics from the on-chain analytics platform IntoTheBlock reveal that long-term holders have securely stored away an unprecedented portion of the available Bitcoin supply.
Resilient Long-Term Bitcoin Holders
Long-term Bitcoin holders have significantly increased their exposure to the asset since mid-2021 and have continued to hold throughout the bear market. Their share of the supply has only seen a few minor reductions.
As of October, 80% of Bitcoin is owned by long-term investors. This represents a record high for the leading cryptocurrency, which has recently started to show signs of price recovery with a rally to just over $35,000.
Additional data suggests that significant accumulation occurred between the $25k-$31k range, indicating the long-term bullishness of investors. Over the past month, Bitcoin has gained over 25%. The recent price action has helped long-term holders surpass the previous record set in 2015.
IntoTheBlock data also reveals that the upcoming Bitcoin halving will further decrease inflation, making the asset even scarcer. Investment banking giant Morgan Stanley has echoed a similar bullish sentiment, stating in a report that the upcoming event, scheduled for next year, will catalyze a new bull run.
However, the current rally has primarily been driven by renewed optimism regarding the approval of a spot Bitcoin ETF in the United States. Investors worldwide are closely monitoring regulatory developments involving Bitcoin ETFs at the Securities and Exchange Commission (SEC). As of now, the SEC has not approved any spot Bitcoin ETF.
Various companies, including Grayscale Investments, ARK Investment, BlackRock, and Fidelity, have submitted applications to the SEC for different Bitcoin ETF offerings and are awaiting regulatory decisions. Experts predict that approval could come as early as 2024, which is expected to trigger a buying frenzy.
Unlocking Institutional Demand for Bitcoin
Institutional investors are highly interested in Bitcoin but are holding off on substantial purchases until a spot Bitcoin ETF receives regulatory approval. This is according to Paul Brody, the global blockchain leader at Ernst & Young (EY), who stated during a segment on CNBC’s Crypto Decrypted that BTC has significant pent-up demand from institutional sources due to the lack of a spot Bitcoin ETF for an extended period. Brody emphasized that once such a fund gets the green light, trillions of dollars from institutions are poised to enter the Bitcoin market.
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