- Several rookie investors are urged to sell out BTC as and when the market performs sloppily
- However, long term investors hold out in hopes of better gains
- Activity among BTC wallets is at an all-time high among a large section of the crypto populace
Thanks to the bold decisions of private entities, especially Tesla and MicroStrategy, among others, to invest heavily in Bitcoin. It was trading at around $9,000. It is now stabilizing at the $50,000 mark, effectively becoming the most precious resource in the world. Its epic stock market run had many people becoming rookie investors investing relatively smaller sums into the raging crypto.
Novice investors fear Bitcoin price volatility
Being new to the field, several novice investors were panic-stricken when they encountered crypto’s volatility from a first-hand perspective. They engaged in frequent buying when the price was high, say at $50,000 with an inherent optimism and sold out when it fell below the $48,000 mark fearing a catastrophic crash. Consequently, they ended up either with a marginal profit, a small loss or recovered their original investment. However, veteran BTC holders have held the crypto for a very long time and even refused to sell their assets throughout its bullish run. This is evident from a chart plotting people’s online on-chain wallet activity.
The chart, termed as “Hodlwaves” from Unchained Capital, also illustrates that Bitcoins that have exchanged wallets for in the past one and half months are at their highest levels since 2018. These accounts mark the largest segment of Bitcoin users pegged at 15%.
In another interesting interpretation from the chart, about 13.5% of all the account holders’ wallets have remained inactive for a period of 3-5 years. This segment includes investors who bought the crypto and just breezed through the recent hype.
Furthermore, wallets inactive for five to ten years have reduced considerably, although the number of inactive accounts has increased considerably from 1.7% to 10% in 2 years. From record heights of about 65%, the share of 1-year inactive wallets has decreased to roughly 55%.
This confirms that nascent investors are selling more rapidly, whereas long term enthusiasts continue to persevere, leading to better profit margins.
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