Who owns bitcoin? About 80% is in the hands of long-term investors: report

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Bitcoin prices have been climbing new heights recently, and the basic dynamics of tighter supply and higher demand have underpinned that rise, according to a report compiled by London-based crypto custodian Copper.co. Copper argued that the recent price increase is a function of the steady increase in demand for BTCUSD bitcoins, -0.81%, and the growing scarcity of the asset that has a maximum supply of 21 million, which is predicted to be affected. at 2140. The researcher also said that most of the interest in new bitcoins comes from North America, and the United States in particular.

Roughly 18.625 million bitcoins have been created, or mined digitally in the language of crypto enthusiasts, according to CoinMarketCap.com, but a good chunk of that has been lost, the people at Copper wrote. According to their estimates, 56% of bitcoins are owned by investors, 18% are lost, 15% are in the hands of so-called merchants, and the rest have yet to be mined (see attached chart):

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via Copper.co

Copper said that because the majority of investors are long-term owners, accounting for eight in 10 cryptocurrency holders, the increased appetite for the world’s most popular digital asset can have a huge effect on values. The researchers said that bitcoin’s surge above $ 40,000 was already in play even before Tesla Inc. TSLA, -5.26% made its surprise filing with regulators on Monday, declaring its $ 1.5 billion investment in bitcoin, and your decision to eventually allow customers to buy your products with bitcoin. “The data shows that new investors pushed prices much higher in the last six months of 2020, to acquire north of 2 [million] bitcoins, ”Copper researchers wrote in the study. “In order to be able to buy bitcoins in such large amounts, the price rose well above the $ 20,000 mark that helped persuade early investors to sell their cryptocurrency above its previous all-time high,” they said. The cryptocurrency market is dependent on a new supply of some 3.2 million bitcoins in exchanges and in the hands of merchants, according to the report. The study also found that investors who have owned at least 1,000 bitcoins for about three months increased their holdings in 2020 by 173%. That growing demand, combined with that restricted supply, helped lift bitcoin values ​​to a total market value of around $ 800 billion, and Copper said the main driver of demand has been North American buyers sourcing the supply. of Asian miners. “The price increase is the result of a marriage of demand and liquidity that took place at the beginning of 2020 when the exits of the exchanges, that is to say, bitcoins that were transferred to the own safekeeping, increased significantly”, according to the investigation of the company. Copper also made an interesting finding, noting that nearly a third of bitcoin trading volume occurs during the period when the New York Stock Exchange is open and investors should focus on trading the Dow Jones Industrial Average DJIA. , + 0.20% and the S&P 500. SPX index, -0.03%. The fact that much of bitcoin trading occurs during stock market hours, between 9:30 a.m. M. And 4 p.m. M. ET, can you explain why movements in the S&P 500 are sometimes correlated with bitcoin prices, Copper wrote.