Data Shows Majority of Bitcoin Owners are Holding at a Profit
After a strong run early in 2021, several cryptocurrencies have since fallen on hard times. In the case of Bitcoin, the asset is now trading for nearly half of its record highs seen just a few short months ago. Nevertheless, the current value is still far ahead of where Bitcoin had been prior to 2020. What’s more, data shows that the majority of Bitcoin currently being held represents a profit to its owner.
According to data collected from Glassnode (and reported by Benzinga), 70% of existing Bitcoins are currently being held at a profit. That would suggest that most Bitcoin investors are long-term holders. In fact, the on-chain data shows that those who sold Bitcoin in recent months were short-term holders. As a result, many of these sellers offloaded their holdings at a loss.
Also notable is that the profit rate is even higher when it comes to Ethereum. Glassnode’s numbers suggest that 80% of Ether (which amounts to about 93 million) is being held at a profit. Those invested in Ether are also expecting to increase when an update to the Ethererum network launches on August 4th, set to have a deflationary impact on the supply.
Of course, while impressive, it’s important to keep in mind that these figures can be skewed given the exponential gains cryptos have made. For example, while early Bitcoin investors may hold several full Bitcoins that were purchased for only a few hundred dollars or less, those who have purchased in the past few years may only own a small fraction of a coin. Therefore, while the number of Bitcoins that are profitable is high, it’s less clear how many individual consumers have made money from the cryptocurrency.
Despite the recent pullbacks, other data suggest that a significant number of consumers are fairly bullish on the possibilities of crypto. As eMarketer reports, more than two-thirds of adults over the age of 18 who own crypto say that they expect such assets to be “somewhat widely” or “very widely” accepted for transactions within the next 10 years. Meanwhile, 38% of adults at large said the same. On the other end, 13% of overall adults said that they would not be widely accepted at all compared to only 7% of crypto users who echoed that sentiment.
Ultimately, while it’s easy for short-term observers to be skeptical of crypto given its recent slump, there’s no doubt that assets such as Bitcoin, Ethereum, and others are growing. Take, for example, the recent news that Visa had seen $1 billion spent on crypto-linked cards just during the first half of 2021. So, although crypto will certainly experience plenty more ups and downs along the way, it’d be foolish to count it out anytime soon.