Bitcoin sees a rise in the number of short-term investors

A recent Bitfinex Alpha report shows a change in Bitcoin ownership. Short-term investments increase, driven by the popularity of spot Bitcoin ETFs, while long-term holders remain confident in the market.

Recently, there has been a notable change in Bitcoin (Bitcoin) ownership in the crypto market, especially among short-term holders.

Short-term Bitcoin investors, i.e. those who typically hold Bitcoin for less than 155 days, have significantly increased their activity. Their combined holdings increased from 2.2 million BTC in January to over 3.4 million BTC in mid-April – representing an increase of almost 55%.

This increase is mainly linked to the increase impact of spot Bitcoin ETFs.

Short-term holders versus long-term holders

According to the report, the increase short term holders indicates a strong level of investment in BTC, driven by the launch and growing popularity of spot Bitcoin ETFs. The concentration of these brief holdings in assets close to the current market price indicates substantial investment activity at this specific price. However, short-term holders also lead to vulnerability and price fluctuations, which can lead to potential risks or price declines.

This number of short-term holders is constantly increasing due to new market participants entering the market and purchasing Bitcoin. However, the price remains the same because older coins are being distributed. The market is still resetting, and the $60,000-70,000 price will be the new floor for BTC, just like $10,000 became a base in 2020.

The supply held by short-term holders is currently approximately 3.3 million BTC, a slight decrease from the mid-April peak. This drop is due to the market correction in March, which occurred after Bitcoin reached its all-time high.

Bullish sentiment for long-term BTC holders

On the other hand, long-term Bitcoin holders are demonstrating a remarkable display of confidence in the market. After Bitcoin reached a new all-time high of $73,666 in March, many long-term holders sold significant amounts of their BTC.

Recent data shows that the Bitcoin selling trend has stopped and instead, long-term holders are now starting to accumulate Bitcoin. The amount of Bitcoin held by investors for over a year has remained almost unchanged, indicating that these investments are being held rather than actively traded.

Furthermore, only about 0.03% of the supply held by long-term investors comprises coins that were purchased at prices higher than the current spot price. In the early stages of a bull market, it is common to see long-term investors holding onto their profitable positions.

Bitcoin whales are also accumulating Bitcoin at a pace reminiscent of the pre-2020 bull run, leading to a new all-time high in its Bitcoin balance.

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