Ryze Recap 6/19: Less Than 20% of Bitcoin is Actively Traded, Most is Held Long Term
Plus, Japanese Investment Giant Nomura Launches Bitcoin Custody Service
Finally, its Friday. If you’re new here— Ryze Recaps is a daily newsletter covering the top stories that Bitcoiners need to know in 2 minutes or less.
We’ve got two brief stories for you today.
Less Than 20% of Bitcoin is Actively Traded, Over 60% is Held Long-Term
A report published by blockchain analytics firm Chainalysis shows that over 60% of Bitcoin is held as a long-term investment. Only 19% is used for trading.
Quick highlights:
Out of approximately 18.6 million BTC that have been mined, ~11.4 million are held by entities who have never sold more than 25% of the Bitcoin they’ve received and have been holding for several years.
Of the remaining 7.2 million that have been mined, 3.7 million BTC haven’t been moved in 5+ years, indicating that this Bitcoin may be lost. This occurs when a wallet owner loses the private key, and nobody can access the Bitcoin.
Only 3.5 million Bitcoin are moved frequently, mainly between exchanges. This is Bitcoin being used for trading. Chainalysis claims that a “maximum of 340,000 people are active Bitcoin traders are on a weekly basis.”
Why it matters:
These findings line up with recent data from Glassnode showing that >60% of Bitcoin in circulation hasn’t been moved in the last year, which is a 4-year high. In addition, a few weeks ago, we found that the total amount of Bitcoin held on exchanges was at an 18-month low. More on this from our 6/16 Recap on dormant BTC.
These statistics indicate that more and more people are holding Bitcoin as a long term investment in digital gold, not as a way to make money in a short time frame. We’re seeing a shift towards accumulating Bitcoin in the long run, instead of trying to trade the volatility for short-term profit.
Was this newsletter forwarded to you? Sign up below for a daily 2-minute recap of the biggest news in Bitcoin.
Japanese Investment Giant Nomura Launches Bitcoin Custody Service
Nomura, one of Japan’s largest investment banks, has partnered with crypto-asset management company Coinshares and crypto-asset security provider Ledger. Together, the three are undertaking a new venture called Komainu, which will provide Bitcoin custody services for institutional investors to safeguard their Bitcoin.
Why it matters:
We’ve seen more interest in Bitcoin from institutional investors this year than ever before, and many companies are scrambling to build out the infrastructure for institutions to invest in Bitcoin. Fidelity found that over 80% of institutional investors find appeal in Bitcoin as an asset, and this interest is further evidenced by massive inflows into Grayscale’s GBTC Bitcoin Investment Trust by institutional investors.
For traditional markets, custody, liquidity, and settlement services are handled by centralized companies called prime brokerages. For Bitcoin, the ecosystem is more fragmented, and we’re seeing businesses partner, merge, and consolidate to offer a suite of comprehensive services. For more, here’s a quick recap of the Prime Brokerage Race from 5/28.
That’s all for today, we’ll be back on Monday with another Ryze Recap. Have a great Father’s Day weekend!