Analysis: Crypto Investors Have Been Buying The Bitcoin (BTC) Dip
Bitcoin “Fans” Stockpiling Amid Dip
Although many have claimed that cryptocurrencies, namely Bitcoin (BTC), have finally bitten the dust in 2018’s market downturn, data indicates that many investors still see copious amounts of value in blockchain-based assets.
Per a report from Bloomberg News’ Olga Kharif, which directly cited data from blockchain analytics unit Chainalysis, BTC has continued to flow into the addresses of “personal wallets,” not just exchanges.
The research group divulged that the 30-day moving average of Bitcoin flow into investors’ wallets has been on the rise, eclipsing the $400 million milestone as of November 1st. Although $400 million out of Bitcoin’s current $65 billion market capitalization isn’t especially notable, considering that in June, this same figure was $300 million (with the price of BTC at ~$6,000 instead of $3,750 (at the time of writing), November’s inflows should could be seen as a bullish indicator.
In an interview, Kim Grauer, an economist at the blockchain data firm, explained that this data suggests that investors have sought to accumulate BTC at lower prices — which lines up with community sentiment at large. Peter Brandt, for instance, explained that he has started to allocate more capital towards Bitcoin, due to his long-term belief in the asset’s underlying value.
Grayscale Investments Now Owns 1% Of All BTC
Not only have “personal wallets” seen an auspicious increase in Bitcoin address balances, but so have institutional players via Grayscale Investments, an investment-centric subsidiary of the conglomerate that is Digital Currency Group (DCG).
Since the start of 2018, Grayscale, headed by one Michael Sonnenschein, has seen its Bitcoin coffers swell by 30,600 BTC to 203,000 total, now accounting for more than 1% of the asset’s total circulating supply.
As seen in the chart above (sourced from LongHash), the wallets pertaining to Grayscale’s GBTC, a vehicle that allows retail and investors to purchase custodied BTC on the U.S. OTC market, has seen month-over-month increases. Cyprus-based Diar wrote on the matter:
“Record inflows however have resulted in record Bitcoin equivalent holdings with December notching up a little versus the start of the previous month.”
Although GBTC’s user base also consists of retail investors, the steady rise in BTC holdings indicates that capital continues to flow into this market through trusted third parties (ironically enough), a plausible positive sign.
Ethereum Whales Also Accumulating
Accumulation hasn’t only been limited to the Bitcoin investment scene. Per data compiled by TokenAnalyst routed through Diar, since January 2018, the amount of Ethereum (ETH) that Ethereum’s top 500 wallets have held has risen by 80%. To put this growth figure into perspective, on January 1st, whales kept 11 million Ether under lock and key, as of November 30th, the same group of users holds 20 million.
This jaw-dropping sum amounts to approximately 15% of all Ether currently circulating, and $2.2 billion in U.S. dollar values, clearly indicating that whales are heavily betting on a market reversal.
Regardless of the exact stimulus behind this bout of accumulation, Diar explained that while the fiat value of whales’ holdings has fallen by ~90%, Q4’s ETH balance growth is up 270% over Q3, a bullish sign, especially in the eyes of optimists.