Key Points
- Bitcoin ETFs and exchanges are having up to eight times more impact than miners, as per a recent report.
- Despite government sell-offs, the number of profitable Bitcoin HODLers remains strong.
A new study suggests that Bitcoin ETFs and exchanges are now having up to eight times more influence than miners.
According to the analysis, the pressure from miners to sell is decreasing with each halving.
Shift in Market Dynamics
Centralized exchanges and ETF providers are now exerting a much larger impact on the market, indicating a shift in market dynamics.
The largest pool of Bitcoin, as monitored by Glassnode, is held in CEXs, amounting to three million BTC, or about one in seven of the total supply that will ever exist.
Furthermore, the 11 firms that have issued exchange-traded funds based on Bitcoin’s spot price have seen a surge in popularity since January.
These firms now collectively hold 887,000 BTC on behalf of investors, thus creating more sell-side pressure on days with substantial outflows.
Impact of Government Sell-offs
Excluding the vast reserves held by Satoshi Nakamoto, miners currently hold about 705,000 BTC.
The German government’s recent sale of close to 50,000 BTC has put additional pressure on Bitcoin’s price.
However, government sell-offs of crypto remain relatively rare, and while concerning to everyday investors, they are not a common occurrence.
Looking at Ethereum, it’s not expected that ETH ETFs will have as much demand as their BTC counterparts, but Wall Street could significantly influence Ether’s performance.
Supply has already been considerably squeezed through staking, and we could see a rapid decrease in the amount of ETH in circulation.
Compared to Bitcoin, there has been “notably less interest” for Ether during the bull run in 2021, when daily ETH exchange flows were almost on par with BTC.
Bitcoin HODLers Remain Profitable
Despite the German government sell-offs, the number of Bitcoin HODLers in profit has remained robust.
Even when Bitcoin’s price dropped to lows of $53,500, about 25% of coins were at an unrealized loss, implying they were now worth less than what investors had paid for them.
The situation becomes more intriguing when focusing on “short-term holders,” as 66% of the BTC they held was tipped into the red during this period, one of the most significant declines ever recorded.
In contrast, “long-term holders” saw a minimal shift in the proportion of their supply held in profit, indicating that relatively few investors from the 2021 bull’s peak still hold onto their coins.
Bitcoin’s price has seen a notable recovery now that the German government has finished offloading Bitcoin on the market.
All eyes are now on whether Bitcoin can break through the psychologically significant barrier of $70,000, a level that hasn’t been reached since June.
Surpassing the all-time high of $73,750 established on March 14, 2014, would be an even bigger challenge.
Setting a new record here would send Bitcoin into an era of unprecedented territory, likely leading to a renewed surge in ETF inflows.
