Rising Tide in Bitcoin Market: Record Bitcoin Accumulation by Small-Scale Holder...

In an unprecedented move, the minor stakeholders of Bitcoin (BTC), known colloquially as “shrimps,” are funneling capital into the cryptocurrency at a pace unseen in recent times. This significant inflow of investments, the highest in the past six years, manifests a collective market sentiment of optimism for Bitcoin in 2023.

An Insight into the ‘Shrimp’ Phenomenon

As per on-chain data, the ‘shrimps’—referring to Bitcoin addresses holding less than 1 BTC— accumulate an average of 33,800 Bitcoin monthly. This rate surpasses the network’s monthly issuance of new BTC, currently sitting at 27,000 BTC. Lead Glassnode Analyst, James Check, made this intriguing observation on his Twitter platform, sparking a fresh discussion within the crypto community.

Check shed light on this trend: “Shrimps are withdrawing 1.25 BTC from the market for every new coin issued.” He continued, “This shows an undeniably strong conviction.” The pace of Bitcoin accumulation by shrimps, in terms of BTC, was quickest during the post-FTX-panic phase when Bitcoin prices plunged to a four-year low of $15,500. However, when assessed in dollar terms, Check emphasized that the present rate of Bitcoin accumulation by shrimps hasn’t been this high since the 2017 bull market climax.

Five years on, shrimps are investing quicker and demonstrating a more resilient approach to maintaining their investments, unperturbed by market fluctuations. As Check points out, they exhibit a bullish sentiment.

The Bitcoin ‘Crabs’ Follow Suit

On a related note, Bitcoin ‘crabs’—entities holding between 1 and 10 BTC—are amassing an additional 22,400 BTC monthly, constituting another 83% of the mined supply. A milestone was reached in May 2023 when addresses holding more than 1 BTC crossed the 1 million mark for the first time.

Comparisons with mined supply gain relevance in the context of those who attribute Bitcoin’s infamous 4-year price cycle to the halving event. This process halves Bitcoin’s supply issuance rate every four years. The subsequent halving is slated for April 2024, although some analysts remain skeptical about its potential to trigger another bull market.

A Shift of Wealth Towards Long-Term HODLers

Reports from Glassnode analysts earlier this year suggested a transfer of wealth from high-time-preference investors to long-term HODLers. The firm established that over 50% of all BTC in circulation had remained unmoved for over two years as of April this year.

These evolving market dynamics influence Bitcoin’s price, which has appreciated by 83% this year, restoring its dominance above 50% in the crypto market.

Market analysts are optimistic about a Bitcoin Spot ETF getting the green light from the U.S. Securities and Exchange Commission (SEC) this year. This move is anticipated to invite further investments into the asset.

None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.