Retail Investors Now Hold a Record 17% of Bitcoin Supply

Retail investors are holding more Bitcoin this year despite the meltdown of several high-profile companies. Furthermore, long-term holders also have the highest portion of BTC supply ever.

It is not all doom and gloom in the world of crypto. Bitcoin on-chain metrics are still positive despite a 75% drawdown in prices.

According to an on-chain analysis by Glassnode, the BTC supply held by retail traders has reached a record 17%. The company defines retail investors as those with wallets holding fewer than ten coins. Additionally, there has been a sharp uptick in retail holdings over the past month or so, according to the chart.

On Dec. 20, Reflexivity Research co-founder Will Clemente commented:  

“Not perfect yet, but solid for a 12-year-old asset and definitely trending in the right direction.”

Bitcoin Holders Remain Resolute

Retail investors are usually the first to panic sell during a market downturn or spell of media FUD (fear, uncertainty, and doubt). That has certainly happened in 2022, as it did in 2018 following the ICO (initial coin offering) crackdown.

Furthermore, retail investors are usually late to the party, piling in only after the bull market has been fully established. Long-term and institutional investors are a little savvier by accumulating at the bottom of the cycle, which is right now.

Long-term Bitcoin holders currently have 85% of the circulating supply, according to a recent report by Coinbase Institutional.

Glassnode confirmed the findings stating that the ‘hodler‘ supply hit a record high of 13.9 million BTC this month. It reported that the amount of long-term Bitcoin holdings is equivalent to around 72.3% of the circulating supply. However, it determines long-term holders as those keeping the asset for more than 180 days.

Nevertheless, both metrics suggest that there is still a lot of conviction and confidence in Bitcoin despite the market turmoil this year.

Coinbase also suggested that “high-quality” assets will be preferred over altcoins in 2023. Institutional investors will primarily favor BTC and ETH for the next few months until the liquidity crunch is over.

Crypto Market Outlook

Crypto markets remain sideways with minor gains today. Total market capitalization is around $844 billion, which is not far off last month’s cycle low.

Analysts are generally of the opinion that the low volatility and sideways trading will continue well into 2023.

“We assign a low probability that crypto performance will decouple from traditional risk assets in the first few months of 2023,” noted Coinbase researchers.