Long-Term Bitcoin Holders Reap Profits as Short-Term Investors Bear Losses


In the tumultuous cryptocurrency market, the traditional rule of thumb—patience pays—is coming back into play as long-term Bitcoin holders are benefiting from the crypto’s recent price surge. While those who have clung to their assets for a prolonged period are reaping the rewards, many recent, quick-footed investors haven’t been as fortunate considering the levels at which they scooped up their Bitcoin holdings.

In light of recent events, on-chain analytics platform, Glassnode, released a gripping market report. According to Glassnode, the total volume of Bitcoin held by long-term holders (referred to as ‘LTH’) currently in loss is effectively “negligible”—an impressive change of circumstances for these stalwart supporters of the coin. Only a mere 4,900 BTC, or 0.03% of the LTH, was bought above Bitcoin’s present price. The tiny fraction of LTH in loss is believed to have belonged to investors who bought during the 2021 cycle peak but maintained their holdings throughout the tumultuous period since.

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As of now, the LTH holders are the proud owners of more than 85% of the Bitcoin supply now in profit—a rather gratifying statistic. Glassnode chalks up this trend to expectations given that the LTH supply in loss during the peak moments of the bull market often dwindles down to almost nothing. Consequently, these LTH are predicted to continue making up the major portion of the profiting Bitcoin supply as the bull run continues its course.

Under the designation of LTH, Glassnode includes tokens held for over 155 days. The majority of investors in this category can be identified as those displaying unyielding audacity throughout the previous bear market—even while Bitcoin dipped under the $20,000 benchmark. Back in these testing times, this LTH supply shouldered the brunt of the unrealized losses.

Conversely, Glassnode’s report highlights that the short-term holders (STH) currently bear the brunt of the market losses. These STH, who keep buying the premier cryptocurrency at both local and global peaks, inevitably find themselves back in a loss every time Bitcoin undergoes a price correction. The figures tell their own story: 1 million BTC—or 26.6% of the 3.35 million BTC making up the STH supply—are currently nursing a loss. A staggering 56% (1.9 million BTC) of this STH supply reportedly slipped into an unrealized loss when Bitcoin recently saw a price reduction, bottoming out at $58,000.

The report also shed light on the fact that a “significant cluster” of STH coins was accumulated near the current spot price, creating a cohort of investors whose actions would be profoundly affected by volatile price fluctuations, regardless of their trajectory. Any severe drop or rise in Bitcoin’s price could trigger these investors to unload their tokens.

Additionally, Glassnode identified another group of investors referred to as ‘Single-Cycle holders’. This investor group has been sitting on a “significant quantity of unrealized profit” ever since Bitcoin surpassed the $40,000 range. These investors have already begun cashing out some profits when Bitcoin reached its current all-time high of $73,000 back in March. Undoubtedly, they will likely be offloading more of their tokens as Bitcoin aspires to break its own record again.