Bitcoin

Bitcoin Investors Dig Long-Term in ‘Staggering’ Change

Bitcoin Investors Dig Long-Term in 'Staggering' Change

Jan 17 (Reuters) – As bitcoin heads into 2022, a growing cohort of long-term investors are doubling their cryptocurrency reserves, hoping a December drop was just a celebratory stunt.

Some industry watchers point to the underlying stability of these long-term investments as potentially promising indicators for the finicky cryptocurrency.

Since last July, for example, the amount of bitcoin held in digital wallets with no exits for more than five months has steadily increased, according to digital currency broker Genesis Trading.

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Additionally, the amount of bitcoin held in “illiquid” wallets – which spend less than a quarter of their inflows – is also increasing, meaning fewer coins are being actively traded, he added, citing wallet data. on several exchanges.

“The number of bitcoins that haven’t moved in over a year has increased since July,” said Noelle Acheson, head of market intelligence at Genesis Trading. “It’s pretty amazing.”

Many investors were nonetheless sent diving for cover in December when the world’s most popular cryptocurrency fell nearly 20%, much the same as the second-largest coin ether, with an appetite for risk hit by inflation fears and a faster pace of US interest rate hikes. Federal Reserve.

While bitcoin and ether both saw gains last week — up 2.9% to $43,107 and 6.3% to $3,350, respectively — they are still far from their 2021 highs of $69,000 and $4,868.

Bitcoin and US stocks

‘STRONG HANDS’

Many cryptocurrency experts warn that no one is known to reliably predict bitcoin’s characteristic price swings. In 2017, for example, it went from around $1,000 to around $20,000. At the start of 2020, it fell below $4,000 at one point before starting a dizzying rise.

Still, advocates of bitcoin and other coins say the growing acceptance of cryptocurrencies in traditional finance and investments in recent years has bolstered the sector.

Cryptocurrency research firm Delphi Digital said its research showed a similar shift toward investors holding bitcoin longer, which it says “illustrates a shift from short-term ‘weak hands’ to investors.” “long-term” strong hands.

Crypto data platform Coinglass’ Bitcoin Fear & Greed Index has been hovering between 10 and 29 year-to-date, which could be an indicator of a possible market bottom and buying opportunities, according to Will Hamilton, Head of Trading and Research at Trovio Capital Management.

“Previous market lows in July 2021 and March 2020 were correlated with fear and greed scores of 19 and 10 respectively,” he added.

For the uninitiated, 0 indicates “extreme fear” and 100 “extreme greed”.

MUSK AND DOGE

There were, meanwhile, more headlines for cryptocurrencies last week.

The meme-based dogecoin stole the show after Tesla (TSLA.O) CEO Elon Musk tweeted that the company would accept it as payment for certain goods. Read more

The tweet sent dogecoin up almost 12%.

“If more people are looking to buy Tesla merchandise with dogecoin, there’s more demand,” Acheson said, adding that the move could improve dogecoin’s fundamentals.

Another targeted altcoin was the Solana cryptocurrency, with analysts at Bank of America saying the Solana blockchain could take market share away from Ethereum and “could become the visa for the digital asset ecosystem.”

Elsewhere, bitcoin miners rebounded from the mining crackdown in China and recent unrest in Kazakhstan, one of the world’s top bitcoin mining hubs. Read more

Bitcoin’s average “hash rate,” a measure of the power of the bitcoin computer network, hit an all-time high of more than 215 million terahashes per second on Thursday, according to blockchain data provider Glassnode.

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Reporting by Medha Singh and Lisa Mattackal in Bengaluru Editing by Vidya Ranganathan and Pravin Char

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