Data tracked by blockchain analytics firm Glassnode shows that more than 13.3 million Bitcoin (BTC) worth $388.7 billion have been dormant on-chain for at least a year. This figure, which is equal to 68.54% of the circulating supply of 19,451,256 BTC, indicates a bias for holding the cryptocurrency for long-term gains, according to analysts at the cryptocurrency exchange Bitfinex. The percentage of circulating supply inactive for at least two years recently jumped to a record 56%, with 40% inactive for at least three years.
This trend, indicative of the prevalent accumulation strategy prevalent amongst long-term holders, showcases a robust belief in Bitcoin’s long-term value, even amidst the notorious downturns that have characterized the cryptocurrency market over the past one year, said the analysts at Bitfinex. This inherent scarcity, juxtaposed with a burgeoning demand, has the potential to drive prices upward. The unwavering faith in Bitcoin paints a bullish picture for the cryptocurrency’s future.
The metric does not take into account the financialization of Bitcoin over the years, which refers to changes in the way people can invest in Bitcoin. Popular alternative investment vehicles such as CME’s cash-settled futures, spot, and futures-based exchange-traded funds (ETFs) allow investors to take exposure to the cryptocurrency without owning it.