Bitcoin is growing increasingly scarce, and its price movements are finally showing it.
Recent statistics from the on-chain analytics platform IntoTheBlock reveal that an unprecedented portion of the accessible BTC supply has been securely stashed away for the long term.
Long-Term Bitcoin Holders Remain Resilient
Long-term Bitcoin holders have significantly ramped up their exposure to the asset starting from mid-2021 and have continued to hold throughout the entirety of the bear market. Only on a few occasions has their share of the supply seen any reduction.
As of October, 80% of Bitcoin is owned by long-term investors. This figure represents a record high for the flagship cryptocurrency, which finally started to show signs of price recovery, with a recent rally to just over $35,000.
Additional data suggest that a massive accumulation occurred around the $25k-$31k area, which is indicative of the “long-term bullishness of investors.” Over the past month, Bitcoin has posted over 25% gains. The latest price action has helped the long-term holders to break the previous record set in 2015.
ITB data also revealed that the upcoming Bitcoin halving will further reduce inflation, making the asset even more scarce. A similar bullish sentiment was echoed by investment banking giant Morgan Stanley, which recently said in a report that the upcoming event, slated for next year, will spark a new bull run.
The latest rally, however, has been driven primarily by the renewed optimism on spot Bitcoin ETF approval in the United States. Investors across the world are closely monitoring the regulatory developments involving assets at the Securities and Exchange Commission (SEC). To date, the financial regulator has not approved any spot Bitcoin ETF.
Several companies, such as Grayscale Investments, ARK Investment, BlackRock, and Fidelity, have submitted applications to the SEC for various Bitcoin ETF offerings and are currently awaiting a regulatory decision. Experts suggest that approval should come in by early 2024. Such a development is expected to trigger a buying rally.
Unlocking Bitcoin’s Pent-Up Institutional Demand
Institutional investors are showing substantial interest in Bitcoin, but they are holding off on a buying spree until a spot BTC exchange-traded fund (ETF) gains regulatory approval, according to Paul Brody, the global blockchain leader at Ernst & Young (EY).
During a segment on CNBC’s Crypto Decrypted, Brody asserted that BTC is harboring substantial pent-up demand from institutional investors because of the lack of a spot Bitcoin ETF for a long period. He emphasized that there are trillions of dollars from institutional sources poised to flow into Bitcoin as soon as such a fund receives the green light.