Newbie Bitcoin Whales Hold 2x As Much As Veterans: What’s Behind This Trend?
April 24 2024 - 1:00PM
NEWSBTC
On-chain data shows the new whale entrants in the Bitcoin market
now hold almost twice as much as the veterans. Here’s what could be
behind this shift. Bitcoin Newbie Whale Holdings Have Been Rapidly
Growing Recently In a new post on X, CryptoQuant founder and CEO Ki
Young Ju has discussed about how the holdings of the new whales
compares against the old ones in the market right now. Related
Reading: Is The Bitcoin Top Already Here? This Historical Pattern
Says So The on-chain indicator of interest here is the “Realized
Cap,” which, in short, keeps track of the total amount of capital
that the investors have used to purchase their Bitcoin. This
capitalization model is in contrast to the usual market cap, which
simply measures the total value that the holders as a whole are
carrying based on the current spot price. In the context of the
current topic, the Realized Cap of the entire market isn’t of
interest, but rather specifically that of two segments: the
short-term holder whales and long-term holder whales. Whales are
defined as entities on the network who are holding at least 1,000
BTC in their balance. At the current exchange rate, this amount is
worth $66.6 million, so the whales are clearly quite massive
holders. Because of these large holdings, these investors can hold
some influence in the market. Based on holding time, the whales can
be subdivided into two categories. The short-term holder (STH)
whales are those who acquired their coins within the past 155 days,
while the long-term holder (LTH) whales have been holding since
longer than this timespan. Now, here is the chart shared by Ju that
reveals the Realized Cap breakdown between these two Bitcoin whale
cohorts: Looks like the metric has shot up for the STH whales
recently | Source: @ki_young_ju on X As is visible in the above
graph, the Realized Cap of the STH whales has historically not been
too different from that of the LTH whales, but that appears to have
changed recently. The metric has pulled away for these new whales
this year with some very sharp growth, as its value has now reached
the $110.6 billion mark. This means that the STH whales have
collectively bought their coins at an initial investment of a
whopping $110.6 billion. The Realized Cap of the LTH whales, on the
other hand, has continued its usual trajectory, floating around
$66.9 billion currently. This means that there is now a massive gap
between the indicator for these two cohorts. But what’s the reason
behind the sudden emergence of this brand-new trend? As mentioned
before, the STH cutoff stands at 155 days, which means that the
Realized Cap of the STH whales would signify the total value of the
purchases made by the whales over the last five months. In the past
five months, there has been one event in particular that has stood
out, which has also never been present in any of the prior cycles:
the approval of the spot exchange-traded funds (ETFs). The spot
ETFs provide an alternative mode of investment into the asset
through a means that’s familiar to traditional investors. These
funds have been bringing in some unprecedented demand into BTC and
as their holdings also fall under the 155 days mark, they would
count as STH whales. Related Reading: Ethereum To See Fresh Move
Soon? What Futures Data Says Bitcoin has also been rallying this
year, so all this new investment would have had to purchase at
relatively high prices, thus causing the Realized Cap, which
correlates to direct capital flows, to inflate even further. BTC
Price Bitcoin is now trading at $66,400 after witnessing a surge of
more than 6% over the past week. The price of the asset seems to
have been overall consolidating sideways recently | Source: BTCUSD
on TradingView Featured image from Todd Cravens on Unsplash.com,
CryptoQuant.com, chart from TradingView.com
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