Bitcoin HODLer’s Behavior has these tips for your next trade
Long-term investors holding Bitcoin [BTC] are more concerned with holding on to their BTCs rather than spending them, even in the face of rising prices, a new report from CoinShares revealed.
In a previously published report, Coinshares found that new investors enter the Bitcoin market, at each halving. Therefore lays the foundation for a new bull cycle. As the price grows during bull cycles, the coin gains more popularity, leading to more investment.
According to its new report, Coinshares theorized that when BTC investors go through a full cycle peak and enter a bear market, they refrain from selling their coins below their purchase price.
By holding on to their coins, they limit supply, which according to Coinshares creates a “downside support … during the price decline, until they finally find profits in the next upswing where many start selling.”
When these investors finally turn a profit, their success encourages a new generation of long-term owners who are brought into the Bitcoin market and then go through the same cycle as their predecessors.
Source: Coinshares
Like your fathers before you
As mentioned above, new investors enter the BTC market at each halving. After the first halving event in 2012, BTC was bought by new entrants in the market at the beginning, and at the end of 2013 remained inactive for five years.
This “holding” by these long-term investors led to a limitation in the supply of the royal coin. That, combined with the 2016 halving event, contributed to the rapid price growth of BTC in 2017. As these investors made a profit, new investors were brought into the market in 2017.
CoinShares found that investors who bought BTC in 2016 and 2017 continue to hold since these coins are sitting idle in their addresses.
According to the report, this category of investors preferred to keep their assets rather than sell even above cost. In this regard, CoinShares stated,
“We are now seeing the same pattern, after taking the course for coins traded at high bitcoin prices in 2017, where a new era of investors have chosen to resist the urge to sell their coins despite the opportunity to realize profits whenever preferably in 2021 This lends some explanatory power to the rise in bitcoin price after the 2020 halving when available bitcoin supply was again limited, while also suggesting that the 2017 class of bitcoin investors hold similar beliefs to those initiated in 2013 .”
Source: Coinshares
In addition, CoinShares found that the class of long-term investors entering the market in 2017 “appears to be hoarding their coins even more aggressively than we’ve seen in previous cycles.”
According to the report, while some investors sent their BTC to exchanges to make money during the 2021 rally, outflows from exchanges have exceeded inflows since 2022, thus indicating that 2017 long-term buyers remain steadfast.
Source: Coinshares
