Management in the Global Bitcoin Market Belongs to a Small Group

Over time, Bitcoin (BTC) began to be perceived as “digital gold”. High-profile investors see BTC as a hedge against potential inflation. Bitcoin price has increased by 30% since the beginning of the year; But recently, many investors expect the rise to continue as trade volume increases during the coronavirus crisis. It turns out that professional traders tightly control the liquidity of the Bitcoin market and account for 85% of all BTC value sent to exchanges.

Bitcoin buyers treat BTC as digital gold and hold it for the long term. This dominance in the Bitcoin market; This means that “professional traders are among the most significant contributors to major market movements such as Bitcoin’s dramatic price drop in March,” according to researchers at analytics firm Chainalysis. Retail traders are classified by Chainalysis as those who deposit less than $10,000 BTC into exchanges at a time; It accounts for the majority of transfers, accounting for 96% of all transfers sent to exchanges on an average weekly basis. In addition, as the restrictions imposed to prevent, or rather slow, the spread of the coronavirus triggered a wave of interest in Bitcoin and cryptocurrencies, the number of BTC transferred per week reached rates not seen since the beginning of 2018.

19% of the Amount of Bitcoin Produced is Used for Trading

Approximately 60 percent of Bitcoin is held by people or businesses who have never sold more than 25 percent of the BTC they have previously purchased. Only 19% of all Bitcoins produced are used for trading. “Data shows that most Bitcoin is held by people who view it as digital gold; "It is emphasized as an asset that should be held in the long term," he said and said: "The number of people who want to trade Bitcoin decreased with the last halving. Moving from the investment area to the trading area, BTC can become a very important source of liquidity. However, this is expected to happen only if the price of Bitcoin rises to a level that long-term investors are risky to choose.”