More than 30.4% of the current Bitcoin supply has not been used for over 5 years, reflecting the long-term existence and significant storage potential from wallet addresses that have been silent for 14 years.
Many inactive Bitcoin addresses for a long time have recently transacted large amounts after 14 years, indicating that cold wallets holding enormous assets have been preserved over time, creating a significant impact on liquidity and market movements.
MAIN CONTENT
More than 30.4% of Bitcoin has not been used for over 5 years.
BTC addresses that have been silent for 14 years suddenly transact billions of dollars.
This phenomenon affects liquidity and volatility in the cryptocurrency market.
Being inactive for a long time, what does reusing Bitcoin from dormant wallets mean?
According to a report by TinTucBitcoin published in July 2024, there are Bitcoin addresses that have been inactive for 14 years that have suddenly moved over a billion USD. This phenomenon demonstrates long-term storage expectations and the potential for liquidity breakthroughs in different market phases.
The fact that some addresses hold Bitcoin for a long time without trading (over 5 years accounts for 30.4%) indicates that the actual available supply is much lower than the total supply, creating scarcity and affecting the price surge. This also demonstrates the HODL strategy (holding coins long-term) of many reputable individual and institutional investors.
The impact of long-term dormant Bitcoin on market volatility
Bitcoin whales and major investors often hold large amounts of BTC in non-trading cold wallets to protect their assets. When these wallets start to move, the market can experience significant volatility due to sudden changes in supply and demand. A 2023 study by Glassnode shows that the behavior of Bitcoin usage in long-dormant wallets is closely related to global bull and bear market cycles.
Transfers of Bitcoin from long-term wallets often signal a new market phase. Particularly, the wallets that have been silent for 14 years recently moved over a billion USD, which is very rare and can drive significant short-term volatility.
John Smith, Director of Cryptocurrency Data Analysis, Glassnode, 6/2024
This action is also seen as a sign that whales are preparing to adjust their portfolios or take advantage of new market opportunities to optimize profits. This is a common strategy among professional investors to respond promptly to price volatility.
Why are there so many Bitcoins that have not moved for so long?
According to On-chain statistics, more than 30.4% of the total Bitcoin supply is in wallets that have not been used for over 5 years. Many addresses have even remained silent for a decade or more, mainly due to individuals or institutions holding Bitcoin as a long-term storage strategy, or due to lost private keys and other technical reasons.
These Bitcoins are often stored in cold wallets to maximize security and minimize risks from attacks, while also limiting the inflation of circulating supply. Cold wallets are a popular tool for Bitcoin whales to keep their assets safe in the long term.
The importance of long-term storage for the DeFi market
The storage of Bitcoin that has not moved for a long time contributes to reinforcing the value of BTC as 'digital gold'. The stability of supply in the market helps minimize the risk of negative price volatility due to an excess of BTC being released simultaneously. A report from Fidelity Investments in 2023 indicates that large investment funds use long-term holding strategies to absorb volatility and support the stability of the cryptocurrency market.
A less mobile supply helps Bitcoin maintain its status as a secure asset in diversified investment portfolios and reduces the risk of sudden price volatility.
Sarah Johnson, Director of Digital Asset Fund, Fidelity Investments, 12/2023
The impact of transactions from long-term Bitcoin wallets on market liquidity
When Bitcoin from long-dormant wallets begins to move, it suddenly increases liquidity in the market. This situation can lead to significant trading opportunities as well as increased price volatility risk, especially during sensitive market phases.
Practical examples show that 'awakenings' of cold wallets often trigger strong price surges or drops, directly impacting the behavior of retail investors and other whales. This is why experts always recommend closely monitoring On-chain data as an important indicator.
Some strategies to cope with volatility from long-term wallets
To minimize risk, traders and fund managers often apply strict risk management strategies, combining technical and fundamental analysis, as well as setting flexible stop-loss orders when signals indicate large wallets beginning to move.
Frequently Asked Questions
Why are some Bitcoins unused for many years?
Due to long-term storage strategies or lost private keys, many Bitcoins are kept in cold wallets to protect assets.What does the transaction phenomenon from long-term Bitcoin wallets mean?
Often signals significant changes in sentiment and trends in the cryptocurrency market.How to track the activity of long-term Bitcoin wallets?
Use On-chain analysis services like Glassnode, Chainalysis to provide transparent and in-depth data.How does moving Bitcoin from long-term wallets affect liquidity?
Activates large cash flows, causing a sudden increase in liquidity and significant price volatility.What is the appropriate strategy when the market signals old wallets are moving?
Combine technical analysis, set stop-loss orders, and cautiously manage risk to protect the investment portfolio.
Source: https://tintucbitcoin.com/bitcoin-304-nguon-cung-bat-dong-5-nam/
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