Bitcoin ‘tourists’ have been cleaned up, only hodlers remain: Glassnode

by · July 4, 2022

So-called “market tourists” are fleeing Bitcoin (BTC), leaving only long-term investors who hold and trade in the top cryptocurrency, according to blockchain analysis firm Glassnode.

In its July 4 Onchain report, Glassnode analysts said that June saw Bitcoin have one of the worst months in 11 years, with a loss of 37.9%. It added activity on the Bitcoin network is on levels at the same time as the deepest part of the bear market in 2018 and 2019, and wrote:

“The Bitcoin network is approaching a state where almost all speculative entities and market tourists have been completely cleared of the asset.”

Despite the almost complete purge of “tourists”, Glassnode noted significant levels of accumulation, stating that the balance between shrimp – those holding less than 1 BTC, and whales – those with 1000 to 5000 BTC, “increased meaningfully.”

In particular, shrimp see the current Bitcoin prices as attractive and accumulate them at a rate of almost 60,500 BTC per month, which Glassnode says is “the most aggressive price in history”, corresponding to 0.32% of the BTC supply per month.

Glassnode explained the purge of these tourist-type investors, and revealed that both the number of active addresses and units have seen a downward trend since November 2021, indicating that both new and existing investors do not interact with the network.

Address activity has fallen from over 1 million daily active addresses in November 2021 to around 870,000 per day in the last week. Similarly, active devices, a collection of multiple addresses owned by the same person or institution, are now about 244,000 per day, which Glassnode says is around the “lower end of the ‘Low Activity’ channel typical of bear markets.”

“A retention of HODLers is clearer in this calculation, as Active Entities generally evolve sideways, indicating a stable base load of users,” the analysts added.

Source: Glassnode

The growth of new units has also dipped to the lowest level from the bear market from 2018 to 2019, with the user base of Bitcoin reaching 7000 daily net new units.

The number of transactions remains “stagnant and sideways”, which indicates a lack of new demand, but also means that the holders are retained through market conditions.

“Transaction demand can be seen moving sideways throughout the bear’s main body,” – Glassnode

Related: Institutional investors who shorted Bitcoin accounted for 80% of weekly inflows

Glassnode concluded that the number of addresses with a balance that is not zero, those who have at least some Bitcoin, continues to reach all-time highs and currently has over 42.3 million addresses.

Earlier bear markets saw a purge of wallets when the price of Bitcoin collapsed. Still, with this calculation indicating otherwise, Glassnode says it shows an “increasing level of determination among the average Bitcoin participant.”