Grayscale: 2016’s Bull Run For Bitcoin Is Repeatable


Grayscale published the Valuing Bitcoin report he prepared for Bitcoin. In the indicator, where several different indicators were examined, it was stated that Bitcoin may be preparing for a new bull run.

According to the Bitcoin report prepared by Grayscale, a new bull run may be at the door of the market. The researchers studied the HODL investors, number of active addresses, whale addresses, and mining revenue. As a result of these investigations, it was understood that Bitcoin painted a picture reminiscent of 2016.

Table In Favor of HODL Doers

Grayscale examining Bitcoin addresses; defined addresses that did not have active transactions for at least one, maximum three years as HODL. In return, addresses that have made transactions in the last 90 days are defined as Speculators.

The increase in the number of addresses that make HODL may mean that investors are entering the accumulative period, which is a bullish indicator. In turn, the increase in the number of Speculators can be interpreted as a bearish indicator.

Grayscale, who made an evaluation on these definitions, explained that the number of addresses that make HODL continues to increase. In contrast, the number of Speculators decreases as the number decreases. At this point, it is concluded that the current appearance of Bitcoin is reminiscent of 2016.


What Is the Number of Active Addresses?

When calculating the number of active addresses per day, the number of unique addresses that make any transaction with Bitcoin during the day is considered. This indicator may not always give the desired result due to the anonymous nature of Bitcoin. However, this indicator can be taken as a basis to see how widespread the use of Bitcoin has become.

Grayscale noticed that the number of active addresses per day was higher than ever since 2017 in his examination of this data. This could mean that Bitcoin is now being used more than in the past months, which is a bullish indicator.

General Status of Whales

Grayscale also took a look at the Whale Index in his report on Bitcoin. Whether an address is a “whale address” is decided by looking at the balance of that address. If the address has more than 1,000 Bitcoins (around 10.8 million dollars) in the balance, that address is classified as “whale”.

Based on the Whale Index, it can be said that the number of these addresses has started to increase rapidly. This; It may mean that large-scale investors are also entering the accumulation process. This accumulation may result in the Bitcoin price rising.


Can Miners Make Money?

Miners have to cover hardware and electricity costs while producing Bitcoin. Miners usually cover these costs by selling the Bitcoins they produce. The increase in bitcoin price; It also increases the profit share of the miners and competition in the sector begins to intensify. In response, a drop in Bitcoin price results in less competition and the survival of only large-scale miners. According to Grayscale, this is interpreted as a positive development for the Bitcoin price.

The green lines in the graph below represent periods when the profit share of Bitcoin miners was shrinking. These periods can be interpreted as a buying opportunity for Bitcoin investors. A bullish appearance appears in the current chart.


As a result of all these evaluations, Grayscale concluded that Bitcoin is ready for a new bull run. The researchers concluded the Valuing Bitcoin report with the following note:

“The blockchain indicators in this report remind you of 2016, when Bitcoin began preparing for the bull run. The supply of Bitcoin is limited, the number of investors interested in it is increasing, and Bitcoin’s infrastructure has become strong enough to meet this demand. “


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