Long-term investors are doubling down on bitcoin
A growing number of long-term investors are doubling down on its holdings of the cryptocurrency as it heads into 2022, hoping a December dip was merely a festive blip.
Some industry watchers point out the stability of the long-term investments as potentially promising indicators for the capricious criptocurrency.
The amount of bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing since July, according to digital currency brokerage Genesis Trading.
It said that the amount of the bitcoin held in illiquid wallets is rising, meaning that less than quarter of their inflows are being traded actively, citing wallet data from several exchanges.
The number of bitcoins that haven't moved in over a year has been climbing since July, according to Noelle Acheson, head of market insights at Genesis Trading. That's pretty staggering. In December when the world's most popular cryptocurrencies plunged nearly 20%, the world's most popular coin ether, with risk appetite hit by inflation fears and a faster rate of interest rate hikes from the U.S. Federal Reserve, many investors were sent for cover, as well as a quicker pace of interest rate hikes from the U.S. Federal Reserve.
Many experts cautioned that no one has been known to predict bitcoin's characteristically wild price swings. In 2017, for example, it went from $1,000 to around $20,000. It dropped below $4,000 at one point in early 2020 before beginning a dizzying rise.
The increasing acceptance of cryptocurrencies in mainstream financial and investment in recent years has shored up the sector, according to advocates ofbitcoin and other coins.
Delphi Digital said that their research showed a similar shift towards bitcoin being held by investors for a longer period, which illustrates a transference from short-term 'weak hands' to long-term strong hands. Since the beginning of the year, the Fear Greed index of Coinglass has wavered between 10 and 29 which could be an indicator of a possible market bottom and buying opportunities, according to Will Hamilton, head of trading research at Trovio Capital Management.
He added that previous market bottoms in July 2021 and March 2020 correlated with Fear and Greed scores of 19 and 10 respectively.
There were more headlines for cryptocurrencies last week, which indicated 0 is extreme fear and 100 is extreme greed.
The company would accept it as payment for select merchandise, according to Tesla CEO Elon Musk.
The doge coin was up nearly 12%, according to the tweet.
If more people are looking to buy Tesla merchandise with doge coin, there's more demand, Acheson said, adding that this move could improve fundamental factors for the doge coin.
The Bank of America analysts believe that the Solana network could pull market share away from ethereum and could become the Visa of the digital asset ecosystem Elsewhere, bitcoin miners bounced back from the mining crackdowns in China and the recent unrest in Kazakhstan, one of the world's largest centres for mining of digital asset.
According to Glassnode, the mean hash rate, a measure of the power of the virtual currency, touched an all time high of over 215 million terahashes per second on Thursday.