A study recently conducted by Chainalysis reveals that most Bitcoins (BTC), 11.4 million coins, are held as long-term investments: of this figure, 60% are in the hands of authorized custodians.
Bitcoin offering breakdown. Source: Chainalysis.
Bitcoin is digital gold
The company found that the breakdown of Bitcoin’s offering is surprisingly similar to that of gold, supporting the theory that cryptocurrency is the digital version of the precious metal. However, unlike gold, there are 3.5 million BTC actively used for trading:
“But this digital gold is also supported by an active trading market, for those who prefer to buy and sell frequently. The 3.5 million Bitcoins used in trading, and their interaction with the level of demand, determines the price. “
In Chainalysis’s analysis, a user who has never sold more than 25% of his assets is considered a long-term investor. Often these individuals hold cryptocurrency for many years.
Small traders make 96% of transactions
Further analyzing Bitcoin trading, Chainalysis found that small traders make 96% of transactions, but professionals move most of the volume:
“Retail traders, which we classify as those who deposit less than $ 10,000 of Bitcoins on exchanges at a time, seem to be the vast majority: they represent 96% of all transfers sent to exchanges on a weekly basis.
However, professional traders control the liquidity of the market: in fact they represent 85% of all the volume of BTC in USD sent to the exchanges. “
Retail and professional traders. Source: Chainalysis.
The company also came to the conclusion that the maximum number of weekly traders in 2020 was 340,000.
60% of Bitcoins are in the hands of custodians
About 60% of the entire Bitcoin offering is held by authorized custodians or Virtual Asset Service Providers (VASP). This statistic also includes exchanges: Coinbase alone owns nearly one million BTC.
Bitcoins lost or held by custodians. Source: Chainalysis.
Finally, the company assumes that 3.7 million Bitcoins have been lost, including the 1.1 million coins generated by Satoshi Nakamoto.