Bitcoin is seeing wealth shift from long-term holders to new investors – Glasnode

Bitcoin (Bitcoin) bull market in progress is marked A remarkable transition Based on recent results, wealth from long-term holders to new investors Glass knot report.

The redistribution of wealth from experienced holders to newcomers is one of the hallmarks of maturing bitcoin markets. Long-term holders have made record profits of up to $2.1 billion a day, while new investors have stepped in with enough demand to absorb the supply.

According to the report, this trend reflects the expanding depth and diversity of the Bitcoin ecosystem, fueled by growing institutional participation and strong retail interest.

In 2024, long-term holders of Bitcoin – especially those who held the coins for 6-12 months – emerged as key factors in the selling pressure. These coins, which were mostly acquired earlier in the year, accounted for 38.5% of the profits realized since November, which totaled $27.3 billion.

Meanwhile, coins held for more than three years have remained relatively muted, suggesting that higher price levels may be needed to motivate them to sell. In contrast, coins held for more than three years have remained largely flat, suggesting that higher price thresholds are necessary to encourage their holders to sell.

The report noted that this is a natural cycle in Bitcoin markets. As prices rise, long-term holders distribute wealth, allowing new investors to absorb supply.

Demand meets profiteering

Despite significant gains by long-term holders, new investors have shown resilience and are providing liquidity that is sustaining Bitcoin's upward momentum. The benchmarks associated with short-term holders (STHs) show their ability to withstand market corrections without cascading sales.

For example, while STH coins experienced unrealized losses during market corrections in August 2023 and September 2024, these losses did not lead to massive panic selling. Instead, strong new demand stabilized the market and prevented significant downturns.

Additionally, the current Bitcoin cycle has also seen less volatility compared to previous bull markets. The deepest drop was 32 percent in August, significantly less than corrections in previous cycles.

Analysts attribute the stability to increased institutional participation, fueled by the introduction of bitcoin exchange-traded funds (ETFs) and wider adoption of digital assets.

In addition to buying pressure from new retail firms, this institutional demand has significantly supported the market, ensuring liquidity at the time of sale and supporting price flexibility.

upside down

The price of Bitcoin rose more than 150% in 2024 to an all-time high of $108,600 and is currently trading near the $100,000 mark after a minor correction. The current cycle's 638 percent growth is consistent with previous halvings, such as a 501 percent increase from 2015 to 2018 and a 1,085 percent increase from 2018 to 2021.

Despite these gains, the market doesn't seem overheated. Glassnode's AVIV ratio, which measures unrealized profits, suggests that the market has not yet reached the typical euphoria of a bull market peak. This indicates the potential for further upside before profit demand is overcome.

As Bitcoin's price dynamics evolve, the interaction between long-term holders and new demand will remain critical. While selling pressure may intensify as prices rise, the current resilience in new investor activity suggests the market is well positioned to maintain its momentum.

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