Bitcoin investors place long-term bets amid slide in active cryptocurrency trading
- The number of ‘illiquid’ wallets holding onto bitcoin long term has been climbing since July, offering investors hope that December decline was a blip
- The Fear & Greed index from crypto data platform Coinglass has wavered between 10 and 29 this year, possibly indicating a market bottom
Some industry watchers point to the underlying stability of such long-term investments as potentially promising indicators for the capricious cryptocurrency.
Since last July, for example, the amount of bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing, according to digital currency brokerage Genesis Trading.
In addition, the amount of the bitcoin held in “illiquid” wallets – which spend less than quarter of their inflows – is also rising, meaning fewer coin are being actively traded, it added, citing wallet data across several exchanges.
“The number of bitcoins that haven’t moved in over a year has been climbing since July,” said Noelle Acheson, head of market insights at Genesis Trading. “That’s pretty staggering.”
Many investors were nonetheless sent diving for cover in December when the world’s most popular cryptocurrency sunk almost 20 per cent, roughly the same as the second-biggest coin ether, with risk appetite hit by inflation fears and a quicker pace of interest rate hikes from the US Federal Reserve.
While bitcoin and ether both posted gains last week – up 2.9 per cent to US$43,107 and up 6.3 per cent to US$3,350, respectively – they are still some way off their 2021 highs of US$69,000 and US$4,868.