The percentage of Bitcoin and Ethereum tokens that have been moved in the past year has fallen to record lows, according to data from The Block. This suggests that investors are holding onto their tokens rather than selling them, which could be a sign of growing confidence in the market.
At its peak, over 59% of Bitcoin’s supply was active between March 2017 and 2018. However, in the past year, only 30.12% of Bitcoin’s supply has changed hands. Ether, which saw over 86% of its supply move between July 2016 and 2017, also hit a record low, with only 39.15% of its supply changing hands in the past year.
There are a few possible explanations for this decline in activity. One possibility is that investors are simply holding onto their tokens in anticipation of further price appreciation. Another possibility is that investors are using their tokens to participate in decentralized finance (DeFi) applications, which require users to lock up their tokens in order to earn rewards.
Whatever the reason, the decline in activity is a positive sign for the cryptocurrency market. It suggests that investors are confident in the long-term prospects of Bitcoin and Ethereum, and that they are not planning to sell their tokens anytime soon.
The record low active supply of Bitcoin comes ahead of the anticipated halving of block emission rewards, currently projected to occur in April of next year. This could be a sign that investors are anticipating a price increase in Bitcoin after the halving, as the supply of new Bitcoin entering the market will be cut in half.
The percentage of tokens that haven’t been touched for three and five years are also at record lows, according to The Block’s data. This suggests that investors are holding onto their Bitcoin for the long term, rather than selling it.
However, while the supply of inactive coins is higher than ever, transactions on the network are also near their peak. This suggests that investors are still using Bitcoin, even if they are not selling it.
Overall, the data suggests that investors are confident in the long-term prospects of Bitcoin, and that they are not planning to sell their tokens anytime soon. The halving could provide a catalyst for a price increase, and investors may be looking to accumulate Bitcoin ahead of this event.