With the rapid growth of the cryptocurrency market in 2021, Bitcoin (BTC) investors increased rapidly and a large circulation began in the supply. However, with this change, experts say that long-term Bitcoin investors no longer control the market and lead the market as short-term Bitcoin investors decrease in number. Because these short-term investors are now starting to invest in the long-term, reducing their Bitcoin (BTC) buying and selling volumes.
Fresh Fund Need of the Market
Blockware principal analyst Will Clementine states that the supply of short-term investors has drastically decreased, which has reduced both selling and buying volumes in the market, or even nearly ending it.
Earlier, the founders of Three Arrow Capital shared data on the share of US citizens owning the cryptocurrency. Data reports that 20% of American adults and 61% of all millennials own over $100,000 in cryptocurrencies. With these data, experts underline that many citizens have a large amount of digital assets and state that the next wave of investors to enter the market may only be fresh funds.
Impact of Long-Term Investors on the Market
Investors who hold Bitcoin (BTC) and other cryptocurrencies for more than 155 days are called long-term investors. The movement of supply in these investors’ wallets remains relatively low compared to short-term investors who actively use their assets, thus hardly affecting the market. Experts state that the whales of the crypto market and other bearish-chasing investors prefer to buy and hold and save funds as soon as the market feels weak, thus reporting an increase in long-term asset investors. In other words, the increase in long-term supply increases because new investors prefer to keep their investments. And so the number of Bitcoin wallets dormant in the crypto market is increasing.
At the time of this writing, Bitcoin (BTC) is trading at $43,353, down 1% in a 24-hour period.