Assessing Bitcoin retail investors’ predicament amid the ongoing bear season

• Retail investors have increased their Bitcoin holdings this year despite the failure of some well-known businesses.
• According to Glassnode’s on-chain analysis, retail dealers currently hold a record 17% of the whole BTC supply.

Despite the collapse of some well-known enterprises, retail investors have increased their holdings of Bitcoin this year. Additionally, the percentage of BTC supply owned by long-term holders is at its greatest level ever.

Not everything in the realm of cryptocurrency is bad. Despite a 75% decline in price, the metrics for Bitcoin on the blockchain are still good.

Glassnode’s on-chain analysis revealed that a record 17% of the total BTC supply is now held by retail dealers. Retail investors are individuals with wallets containing fewer than ten coins. The data also shows that over the past month or so, retail holdings have sharply increased.

As investors await US consumer confidence data on 21 December, the Bitcoin price prediction for the Asian session remains gloomy beneath $17,000. At press time, the price of Bitcoin was at $16,870, and $19 billion worth of transactions take place every day. On 20 December, the BTC/USD pair increased by over 0.15%.

There is still hope?

On 20 December, Reflexivity Research co-founder Will Clemente said,

“Not perfect yet, but solid for a 12-year-old asset and trending in the right direction. Bitcoin’s supply disperses over time, while fiat’s holder base concentrates on whales over time.”

The percentage of Bitcoin supply held by retail has soared to 17% this year.

Not perfect yet, but solid for a 12-year-old asset and definitely trending in the right direction.

Bitcoin’s supply disperses over time, while Fiat’s holder base concentrates to whales over time. pic.twitter.com/ipDbWVmcEl

— Will Clemente (@WClementeIII) December 20, 2022

Clemente submitted a Glassnode figure that demonstrated that the percentage of the Bitcoin supply held by retail investors has increased steadily since 2011. 

The findings were corroborated by Glassnode, which noted that the ‘hodler’ supply reached a record high of 13.9 million BTC this month. According to the analysis, long-term Bitcoin holdings account for about 72.3% of the total supply. Long-term holders, however, are those who keep the asset for longer than 180 days.

This appears to be supported by data from IntoTheBlock, another blockchain analytics service. According to the company’s page on the distribution of Bitcoin holdings, addresses with 0–10 BTC represent 17.3% of the entire supply of Bitcoin.

Early in 2020, this number was less than 12%, but in 2022 it started to rise dramatically. Late 2013 into early 2014, as well as late 2017—each a late bull market/early bear market period for Bitcoin—were other instances of significant retail accumulation.

Despite the upheaval in the market this year, these indicators indicate that there is still a lot of conviction and faith in Bitcoin.

Additionally, Coinbase asserted that in 2023, “high-quality” assets would prevail over cryptocurrencies. For the upcoming several months, up until the liquidity crunch is resolved, institutional investors will predominantly choose BTC and ETH.

The crypto winter

Today’s (21 December) cryptocurrency markets are still moving sideways while making modest gains. The total market value, at press time, was at $844 billion, which is not too far off the cycle low from last month. The consensus among analysts is that the low volatility and sideways trade will last well until 2023.

Bitcoin has received a lot of flak for its high degree of ownership concentration, which some people feel undermines the decentralized claims made by its proponents. According to Bloomberg, only 2% of accounts held 95% of all Bitcoin as of November 2020.

But as Glassnode pointed out in direct response, this number did not take into consideration the distinction between people and wallet addresses.