Chainalysis, a data analysis firm for various blockchain networks, has recently pushed out a report that a massive segment of Bitcoin’s total supply is currently being held in long-term investments. The firm also stated that 60% of these investments are done via licensed custodians.
BTC Behaving Like Gold
In short, the company concluded that Bitcoin’s supply acts quite similarly to gold, which puts gravity on its status as digital gold. As a clarification, however, the firm stated that 3.5 million Bitcoin stands as actively traded, which helps support the currency’s price. Through the support of the active trading market of individuals buying and selling frequently. Through doing this interaction, Bitcoin is capable of determining the price.
The official definition of a long-term investor by Chainalysis is an individual that’s never sold more than 25% of their holdings. The firm took note that these users regularly hold on to their assets for many years, as well.
Further analysis within the trading of Bitcoin’s trading segment of its supply has led to some interesting results. Chainalysis had concluded that 96% of the total transactions are made by retail traders. Even so, the data analytics firm had concluded that professional traders move the bulk of the volume.
Chainalysis classified retail traders as individuals that deposit less than $10,000 of BTC in value on exchanges at one time. While 96% of Bitcoin traders are classified as such, the professional traders are the ones controlling the market liquidity, with the 4% of these traders managing to control 85% of the Bitcoin’s USD value sent to exchanges.
Chainalysis further concluded that the maximum amount of weekly traders for 2020 so far, has been clocked in at a staggering 340,000
Custodianship And Centralization
It’s estimated that 60 of the entire Bitcoin supply is currently held by either Virtual Asset Service Providers (VASPs) and licensed custodians. The statistics factored in a wide array of exchanges. Coinbase, one of the most prominent players and based in the US, holds an almost 1 million BTC on its own.
Chainalysis ran with an assumption that 3.7 million BTC has been lost. This included an estimated 1.1 million coins that were suspected to be mined by Satoshi Nakamoto himself.
Custodianship has seen an ever-expanding role within the crypto industry, which may only complicate the current status of the coin even more. Many already believe the crypto space has been too centralized as of late, and custodianship only sees its expansion.